Jiemian News:

We have seen that China's CPI stayed flat compared with a year earlier, and the core CPI has been relatively low. Does that mean weak demands have not yet improved? How does the NBS view the inflation situation in the fourth quarter? Thank you.

Sheng Laiyun:

Thank you for your questions. China's CPI in September remains unchanged from a year earlier, but I need to stress that CPI in September increased on a month-on-month basis, with an increase of 0.2%. That the CPI in September stayed flat year on year is due to the comparison base last year, affected by the tail effect. The month-on-month data would be a very good way to review the short-term changes in prices. As of September, the CPI has been rising month on month for three consecutive months. The year-on-year decline in PPI has been narrowing significantly for three consecutive months. PPI in June dropped by 5.4% year on year, a low point in the year. PPI in September decreased by 2.5%, narrowing by 2.9 percentage points from June. It illustrates that prices have rebounded from a low level, signaling the recovery of the aggregate demand of society.

Secondly, changes in China's price indexes, especially in CPI, demonstrate clear structural features, and the core CPI was relatively stable. In the year to date, the CPI has dropped year on year. However, according to the performance of the food price index, in the first quarter, food prices rose by 3.7% year on year, while the price increase fell back to 1.2% in the second quarter. However, the year-on-year sharp decline in hog prices in the third quarter led to a decrease in the food price index, which had a significant impact on the performance of the CPI. In the price index for industrial consumption products, the prices of crude oil, especially the fluctuation of international crude oil prices, also exerted an important influence on the performance of prices. The core CPI, excluding the influence of food and energy prices, was generally stable. The core CPI in the first three quarters of this year rose by 0.7% year on year, with minor monthly fluctuation.

Thirdly, changes in China's prices are different from international trends. Recently, global commodity prices have risen sharply, and global inflation remains high. In spite of the U.S.'s rate hikes, the CPI in the U.S. increased by 3.7% in September year on year, and the CPI in the eurozone rose by more than 4%. Therefore, high inflation has become a crucial factor in influencing economic recovery and development. However, China has maintained generally reasonable and sufficient liquidity, and its price trends stand in sharp contrast to international price trends. From the perspective of macro regulation, China's prices are a highlight when looked at from a global context. Surely, it is not the case that the lower the price, the better. With the recovery of aggregate demand and the economy, prices will rise moderately. Thank you.

Shou Xiaoli:

Thanks to Mr. Sheng and friends from the media. Today's briefing is hereby concluded. See you!

Translated and edited by Xu Xiaoxuan, Li Huiru, Wang Qian, Zhu Bochen, Mi Xingang, Yuan Fang, Yang Xi, Zhang Junmian, Wang Yiming, Li Xiao, Yan Bin, Zhou Jing, Xiang Bin, Wang Wei, Xu Kailin, David Ball, Tom Arnsten, and Jay Birbeck. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.