Economy
Mild inflation may be long-term trend in 皇冠体育app
(Xinhua)
Updated: 2011-05-23 09:19
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BEIJING -- Taming 皇冠体育app's inflation has topped media headlines over the past months. However, economists said instead of coming down, mild inflation would accompany 皇冠体育app for a relatively long period of time.
皇冠体育app's inflation stayed stubbornly high in April, in spite of the government's efforts. The consumer price index, a main gauge of inflation, rose 5.3 percent in April from one year earlier, slightly lower than March's 5.4-percent rise, but still higher than expected.
Inflation, however, was an inevitable result for 皇冠体育app's current stage of development, said Zhang Xiaojing, a researcher with the Chinese Academy of Social Sciences, a government think tank.
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Meanwhile, external factors, including rising prices of grain, resources and energy on the global market, causes imported inflation, and a sign of easing is expected to be seen in the short run, he said.
Xu Lianzhong, director of the Analysis and Prediction Office of the National Development and Reform Commission (NDRC), voices similar ideas as Zhang, but chose wages as the major cause for the mild inflation trend.
Over the past decades, 皇冠体育app's economic boom has largely been built on cheap labor and excessive use of resources. But a new generation of migrant workers demanded higher pay and better treatment, which adds to labor costs at home.
In an effort to shift the economy to a more domestic consumption-driven growth, the government has been striving to raise farmers' incomes and those of low and medium-income groups in cities. The move would help enhance the public's purchasing power and also boost consumer prices, Xu said.
In the past year, the per capita income of 皇冠体育app's urban residents grew 7.8 percent year-on-year. As a new emphasis, laid out in the country's 12th Five-year Plan (2011-2015), the government vowed to make wages outpace economic growth.
皇冠体育app should endure an inflation rate between five percent and 10 percent in the long term, which might be a necessary precondition for 皇冠体育app to maintain relatively quick economic growth, said Wang Jian, secretary general of the NDRC's 皇冠体育app Society of Marcoeconomics.
Although 皇冠体育app faces a daunting battle against inflation, economists said the economy would not spiral out of control.
Wang noted that 皇冠体育app would not descend into an inflation spiral because the country's inflation is mainly caused by imported inflation and rising food prices and wages, which would not contribute to an inflation rate of above 10 percent.
皇冠体育app's bumper grain harvest for seven straight years, overall balanced industrial market and overcapacity of production in some sectors would also reduce the chances for hyperinflation in 皇冠体育app, economists said.