Soaring price still worries China

The August consumer price index (CPI) signals cooled inflation in China, but the surging prices remain a big concern for the country. Premier Wen Jiabao said this week that he "cannot relax" due to high prices in China that have led to steep rises in the cost of food, vowing to step up the fight against inflation. China's CPI rose 6.2 percent in August year-on-year, down from its 37-month high of 6.5 percent in July, but it is still one of the highest levels in the past three years and far above the government's 4-percent target for the year. On a monthly basis, the August CPI was still 0.3 percent higher than that in July, according to the National Bureau of Statistics. Food price, especially pork price, continues rocketing and property price is still “too high” for most urban citizens though more cities saw price declines in August, which have a direct impact on many Chinese residents. Food Prices Continue to Rise China's statistics authority said on Wednesday that food prices, including those of staples, meat, edible oil and vegetables, continued rising in the first 10 days in Sept. compared to the Aug. 21-30 period. The price of pork remained stubbornly high and was up 0.8 percent. The pork price in August surged 45.5 percent from a year ago, and was the leading contributor to the surging food prices, which rose 13.4 percent year-on-year last month. Prices of rice and flour both rose 0.2 percent during the period; the price of soybean oil rose 0.8 percent, according to figures released by the National Bureau of Statistics (NBS). The price of beef price rose 1.1 percent, with chicken up 0.6 percent; most vegetables saw price increases during that period with cabbage rising 1.8 percent and celery up 1.1 percent. The rising food prices show that inflationary pressure remains high as food prices account for about one third of the weighting in CPI calculation in China. On Wednesday, the Asian Development Bank (ADB) said that inflation remains a concern for the world's second-largest economy, with the average rate expected to remain above the 4 percent goal despite the numerous policy initiatives taken by the government. The ADB's 2011 inflation estimate was revised up to 5.3 percent from 4.6 percent in April, largely because of the sharp spike in food prices.