Coming up

Don't miss




Paris, Haute Couture Fall/Winter 2014-2015.

Read more


Exclusive: an unlikely victim of the 'War on Terror'

Read more


2014-07-11 21:47 AFRICA NEWS

Read more


Finally, a good use for new app "Yo"

Read more


The World This Week - 11 July 2014 (part 2)

Read more


The World This Week - 11 July 2014

Read more

#THE 51%

Sweden: A Feminist's Paradise?

Read more


Politics: parties under pressure

Read more


In Burma, the rise of radical Buddhism

Read more

  • Israeli special forces attack Hamas base inside Gaza Strip

    Read more

  • Holland beat hosts Brazil 3-0 to finish third in World Cup

    Read more

  • Afghan presidential candidates agree to full vote audit, Kerry says

    Read more

  • France’s Kadri wins eighth stage at Tour de France

    Read more

  • Germany vs Argentina - history and genius clash in World Cup final

    Read more

  • Legal challenge to French mayor’s ban of Muslim hijab on beach

    Read more

  • Last of the Ramones, Tommy Ramone, dies aged 62

    Read more

  • Video: Outrage in wake of deadly Casablanca buildings collapse

    Read more

  • Iraqi forces ‘executed prisoners in reprisal’ for ISIS killings

    Read more

  • Ukraine promises retaliation after rebel assault

    Read more

  • Putin revives old Cuban flame and eyes Latin American minerals

    Read more

  • Amazon snubs French free delivery ban with one-cent charge

    Read more

  • Cleveland's NBA fans hail 'return of king' LeBron James

    Read more

  • Exclusive: an unlikely victim of the 'War on Terror'

    Read more

  • Magnitude 6.8 quake, small tsunami hit east Japan

    Read more


Rises in consumer and property prices in April


Text by News Wires

Latest update : 2010-05-11

Beijing is under pressure to hike interest rates and keep the world's third largest economy from boiling over as figures show increased inflation in China in April, as well as a jump in property and consumer prices.

AFP - China said Tuesday that consumer prices and bank lending accelerated in April, fuelling fears the economy may overheat and building pressure on Beijing to hike interest rates and let its currency rise.

Property prices also marked a double-digit rise for the third straight month, signalling measures introduced by the government in recent weeks to curb inflation and rein in soaring prices were having little effect.

"Currently, prices are rising quite fast," a spokesman for the National Bureau of Statistics, Sheng Laiyun, told reporters, though he insisted those increases remained "relatively mild".

"In the near term, prices are still under quite significant upward pressure. Total demand is still on the rise and domestic liquidity is still abundant."

The consumer price index, the main gauge of inflation, rose a higher-than-expected 2.8 percent compared with April last year, outpacing the 2.4 percent jump in March, the NBS reported.

Analysts had expected an increase of 2.7 percent, according to Dow Jones Newswires.

Sheng emphasised it was still possible for Beijing to achieve its own inflation target of three percent for the year, but analysts expressed concern that the rises were too fast.

The figures sent stocks tumbling to near one-year lows.

"China is at risk of overheating, with spot fires breaking out in various parts of the economy, most notably the property market and bank lending," said Brian Jackson, a senior analyst at Royal Bank of Canada in Hong Kong.

Jackson said higher interest rates and a moderate appreciation in the currency would help Beijing keep inflationary pressures from reaching "damaging levels".

New loans issued by Chinese banks hit 774 billion yuan (113 billion dollars) in April after falling to 510.7 billion yuan in March while property prices rose 12.8 percent year-on-year last month, official data showed.

Instead of raising interest rates to calm inflation, the central bank has increased banks' reserve requirements three times this year, which effectively limits the amount of money they can lend.

Policymakers have also introduced a series of measures in recent weeks to rein in property prices.

Among them are a tightening of restrictions nationwide on advance sales of new property developments, the introduction of new curbs on loans for third home purchases and the raising of minimum down-payments for second homes.

The Shanghai Composite index closed down 1.9 percent at 2,647.57, with property shares among the biggest losers.

Sheng warned that while China's economic recovery was now on a more solid footing, high unemployment in the United States and Europe's debt crisis would impact the country's exports this year.

Weaker demand for Chinese-made goods could prompt Beijing to delay a move on the value of the yuan, which has been effectively pegged at 6.8 to the dollar since mid-2008 to support exporters during the financial crisis.

The Asian nation rebounded to a trade surplus of 1.68 billion dollars in April, but that figure was down 87 percent from the previous year, official figures released Monday showed.

Despite the pick-up in inflation, economists believe the central bank will wait until the middle of the year before raising interest rates.

"The rate hike seems to have been delayed to give room for the market to absorb the recently announced property tightening measures," said UBS economist Wang Tao.

"We expect... three hikes in benchmark interest rates starting mid-year."

However, a top government economist said at the weekend that the scope for a rise was small because economic growth likely peaked in the first quarter and rates in the United States and other countries remained relatively low.

A Chinese rate hike could encourage speculative funds to flow into the country to take advantage of the relatively higher yield, said Ba Shusong of the cabinet's Development Research Centre, according to media reports.

Urban fixed asset investment, a measure of government spending on infrastructure and a key driver of China's economy, rose 26.1 percent in the January-April period to 4.67 trillion yuan, the NBS said.

Industrial output from the country's millions of factories and workshops rose 17.8 percent year-on-year in April, while retail sales were up 18.5 percent to 1.15 trillion yuan.

Date created : 2010-05-11