SHANGHAI'S inflation moderated slightly in September under tightened policies and a cooling economy.
The Consumer Price Index, the main gauge of inflation, expanded 5.7 percent from a year earlier last month, down from 5.8 percent in August, the Shanghai Statistics Bureau said yesterday.
Food costs, which accounted for nearly one-third of the total basket, jumped 11.8 percent year on year, easing 0.8 percentage point from that in August.
"Lower food prices helped most to contain inflation," said Wang Zehua, an analyst at the bureau. "Although it is still at a rather high level, consumer prices may start to go downward in the coming months."
In the first three quarters, consumer prices in Shanghai rose 5.2 percent annually, far exceeding the government target of under 4 percent.
But Shanghai performed better than the nation as a whole. China's September consumer prices advanced 6.1 percent, albeit cooling for a second month from August's 6.2 percent and July's 37-month high of 6.5 percent.
"Shanghai's efforts in boosting supply and fighting speculation have been paid off," said Li Maoyu, an analyst at Changjiang Securities Co.
Since the middle of last year, the city government made arduous efforts to guarantee supply of various products. The city has carried out a set of policies, including streamlining the distribution process to lower costs, providing subsidies for producers to boost supply, and enhancing regulations to punish speculators who distort prices. It has also strengthened supervision to prevent swindling, conspiring, price-fixing and hoarding.
Shanghai's moderating economic growth also contributed to a cooling inflation, Li said. In the first half, Shanghai's gross domestic product expanded 8.4 percent from a year earlier, slowing from 9.9 percent in 2010 and 12.7 percent in the first six months of 2009.
Smaller fixed-asset investment and fewer exports led to the weakening economic growth. In the first three quarters, Shanghai's fixed-asset investment dropped 2.2 percent from a year earlier while exports just recovered to the level before the 2008 global financial crisis.
Cai Xuchu, chief economist at the bureau, said earlier Shanghai's economic growth will continue to moderate but would not show an abrupt slowdown. The city is yet to release its third-quarter GDP data.
Source:shanghaidaily