China's July CPI eases to 30-month low

 BEIJING, Aug. 9 (Xinhua) -- China's consumer inflation eased to its lowest rate in two and a half years in July, giving the government more leeway to loosen credit to spur the slowing economy.

The consumer price index (CPI), a key gauge¹ of inflation, grew to 1.8 percent year on year in July, the slowest rate since February 2010, the National Bureau of Statistics (NBS) announced Thursday.

The rate was 0.4 percentage points lower than the figure for June.

The Producer Price Index (PPI), a main gauge of inflation at the wholesale² level, fell 2.9 percent in July from a year earlier.

The easing inflation is believed to be a result of the base effect. The CPI growth rate hit a 37-month high of 6.5 percent in July last year before gradually retreating as China's economy slowed for eight quarters in a row.

Food prices, which account for nearly one-third of the prices used to calculate China's CPI, edged up 2.4 percent in July from a year ago, down from a growth of 3.8 percent in June.

Surging vegetable prices were the driving force for the CPI's growth. Rain and flooding affected³ vegetable production in many places during the peak supply season, pushing up vegetable prices by eight percent.

Pork prices fell 18.7 percent, dragging down CPI growth by 0.71 percentage points, NBS said.

Zhang Liqun, a researcher with the Development Research Center under the State Council, said abundant domestic agricultural production has helped stabilize⁴ prices. He called for more attention to be paid to severe ongoing⁵ droughts in the United States that are expected to impact China's edible⁶ oil and grain prices.

Although the falling inflation rate was largely attributed to easing food prices, Zhang said it actually reflects shrinking social demand amid the slowing economy.

Qu Hongbin, chief economist⁷ at HSBC China and co-head of Asian Economic Research at HSBC, said the data suggests that China's real economy, especially industrial enterprises, are facing increasing deflationary pressure.

"The decline of the PPI has highlighted the grim facts of sluggish⁸ market demand, shrinking business orders and continuing destocking," he said.

Dwindling⁹ orders from Europe and other trade partners have sapped China's exports and, combined with a cooling property sector¹⁰, slowed the country's economic growth rate to 7.6 percent in the second quarter, the lowest level since the first quarter of 2009.

At a meeting of the Political Bureau of the Communist Party of China (CPC) Central Committee that was presided over by President Hu Jintao on July 31, authorities reaffirmed that they will prioritize stable economic growth and adhere to a proactive fiscal¹¹ policy and prudent¹² monetary¹³ policy to weather current economic hardships.

To boost growth, the government has loosened the monetary supply, cut taxes for small businesses and encouraged private businesses to invest in sectors¹⁴ previously¹⁵ closed to them.

The central bank has cut its lending and deposit rates twice, as well as lowered the amount of funds that banks must keep in reserve.

Since the easing inflation rate offers more room for monetary expansion, Liu Ligang, an economist with ANZ National Bank Limited, said the central bank will lower the reserve requirement ratio in August, as well as another time within the year.

But he did not take the deflation risk seriously, citing his belief that consumer prices are likely to rebound¹⁶ slightly in the following months due to a waning¹⁷ base effect.

According to Wang Jun, a researcher at the China Center for International Economic Exchange, climbing costs will cause the CPI to surpass 2 percent before long.

The central bank warned in a quarterly monetary policy report that consumer prices could bounce back after August on the back of rising costs for labor¹⁸ and resource-intensive products such as electricity, water and natural gas.

Despite expectations for a slight price rebound, analysts¹⁹ generally agreed that the annual inflation rate will remain below three percent, well within the government's target of four percent for the year.

1 gauge   

v.精确计量；估计；n.标准度量；计量器

参考例句：

• Can you gauge what her reaction is likely to be?你能揣测她的反应可能是什么吗？
• It's difficult to gauge one's character.要判断一个人的品格是很困难的。

2 wholesale   

n.批发；adv.以批发方式；vt.批发，成批出售

参考例句：

• The retail dealer buys at wholesale and sells at retail.零售商批发购进货物，以零售价卖出。
• Such shoes usually wholesale for much less.这种鞋批发出售通常要便宜得多。

3 affected   

adj.不自然的，假装的

参考例句：

• She showed an affected interest in our subject.她假装对我们的课题感到兴趣。
• His manners are affected.他的态度不自然。

4 stabilize   

vt.（使）稳定，使稳固，使稳定平衡；vi.稳定

参考例句：

• They are eager to stabilize currencies.他们急于稳定货币。
• His blood pressure tended to stabilize.他的血压趋向稳定。

5 ongoing   

adj.进行中的，前进的

参考例句：

• The problem is ongoing.这个问题尚未解决。
• The issues raised in the report relate directly to Age Concern's ongoing work in this area.报告中提出的问题与“关心老人”组织在这方面正在做的工作有直接的关系。

6 edible   

n.食品，食物；adj.可食用的

参考例句：

• Edible wild herbs kept us from dying of starvation.我们靠着野菜才没被饿死。
• This kind of mushroom is edible,but that kind is not.这种蘑菇吃得，那种吃不得。

7 economist   

n.经济学家，经济专家，节俭的人

参考例句：

• He cast a professional economist's eyes on the problem.他以经济学行家的眼光审视这个问题。
• He's an economist who thinks he knows all the answers.他是个经济学家，自以为什么都懂。

8 sluggish   

adj.懒惰的，迟钝的，无精打采的

参考例句：

• This humid heat makes you feel rather sluggish.这种湿热的天气使人感到懒洋洋的。
• Circulation is much more sluggish in the feet than in the hands.脚部的循环比手部的循环缓慢得多。

9 dwindling   

adj.逐渐减少的v.逐渐变少或变小( dwindle的现在分词 )

参考例句：

• The number of wild animals on the earth is dwindling. 地球上野生动物的数量正日渐减少。 来自《简明英汉词典》
• He is struggling to come to terms with his dwindling authority. 他正努力适应自己权力被削弱这一局面。 来自辞典例句

10 sector   

n.部门，部分；防御地段，防区；扇形

参考例句：

• The export sector will aid the economic recovery. 出口产业将促进经济复苏。
• The enemy have attacked the British sector.敌人已进攻英国防区。

11 fiscal   

adj.财政的，会计的，国库的，国库岁入的

参考例句：

• The increase of taxation is an important fiscal policy.增税是一项重要的财政政策。
• The government has two basic strategies of fiscal policy available.政府有两个可行的财政政策基本战略。

12 prudent   

adj.谨慎的，有远见的，精打细算的

参考例句：

• A prudent traveller never disparages his own country.聪明的旅行者从不贬低自己的国家。
• You must school yourself to be modest and prudent.你要学会谦虚谨慎。

13 monetary   

adj.货币的，钱的；通货的；金融的；财政的

参考例句：

• The monetary system of some countries used to be based on gold.过去有些国家的货币制度是金本位制的。
• Education in the wilderness is not a matter of monetary means.荒凉地区的教育不是钱财问题。

14 sectors   

n.部门( sector的名词复数 )；领域；防御地区；扇形

参考例句：

• Berlin was divided into four sectors after the war. 战后柏林分成了4 个区。 来自《简明英汉词典》
• Industry and agriculture are the two important sectors of the national economy. 工业和农业是国民经济的两个重要部门。 来自《现代汉英综合大词典》

15 previously   

adv.以前，先前（地）

参考例句：

• The bicycle tyre blew out at a previously damaged point.自行车胎在以前损坏过的地方又爆开了。
• Let me digress for a moment and explain what had happened previously.让我岔开一会儿，解释原先发生了什么。

16 rebound   

v.弹回；n.弹回，跳回

参考例句：

• The vibrations accompanying the rebound are the earth quake.伴随这种回弹的振动就是地震。
• Our evil example will rebound upon ourselves.我们的坏榜样会回到我们自己头上的。

17 waning   

adj.（月亮）渐亏的，逐渐减弱或变小的n.月亏v.衰落( wane的现在分词 )；（月）亏；变小；变暗淡

参考例句：

• Her enthusiasm for the whole idea was waning rapidly. 她对整个想法的热情迅速冷淡了下来。
• The day is waning and the road is ending. 日暮途穷。 来自《现代汉英综合大词典》

18 labor   

n.劳动，努力，工作，劳工；分娩；vi.劳动，努力，苦干；vt.详细分析；麻烦

参考例句：

• We are never late in satisfying him for his labor.我们从不延误付给他劳动报酬。
• He was completely spent after two weeks of hard labor.艰苦劳动两周后，他已经疲惫不堪了。

19 analysts   

分析家，化验员( analyst的名词复数 )

参考例句：

• City analysts forecast huge profits this year. 伦敦金融分析家预测今年的利润非常丰厚。
• I was impressed by the high calibre of the researchers and analysts. 研究人员和分析人员的高素质给我留下了深刻印象。