CNR:

I have two questions. First, the investment in real estate development in the first eight months has witnessed a relatively stable increase, both the housing areas being newly developed and sold continued to grow year on year. Do you think the investment increase will last in the second half of this year? In addition, the "golden September and silver October" are usually the best months for the real estate industry, but some argue that September and October this year will witness a sluggish performance compared to previous years. What do you think of this? The second question is: we have also seen that PPI and CPI have been rising year-on-year. Does it mean that inflationary pressures still exist? How do you think the CPI will change in the H2? Thank you.

Liu Aihua:

Thanks for your questions. Let me address your first question about the real estate market first. The regulation on the real estate market since last year has manifested its effects in two aspects.

First, the housing prices in popular cities have kept rising too quickly. As seen from the housing prices of 70 large and medium cities in July, the year-on-year increases of new commercial housing prices in 15 first-tier cities and popular second-tier cities have all slowed down markedly, ranging from 0.8 percentage points to 4.9 percentage points; with month-on-month increases have narrowed down as well. Second, de-stocking has speeded up. By the end of August, the areas of commodity housing for sale had fallen by 12 percent year on year, and one percentage point higher than that of the end of last month.

As you said, real estate sales are still growing at a relatively fast rate. From January to August, the national commercial housing sales grew by 12.7 percent. During the same period, the investment in real estate development increased by 7.9 percent year on year at a relatively steady speed. In addition, from the supply side, the recent policies of some government departments including pilot rental housing will expand the supply of commercial housing and channel some of the demand. Therefore, the real estate market is expected to maintain a steady and healthy development overall under the exploration and efforts of all the regions and various government departments.

Liu Aihua:

The second question is about the CPI. In August, the CPI rose 1.8 percent year on year and 0.4 percent from the previous month. In fact, the expansion of the CPI increase in August is mainly attributed to seasonal factors. The month-on-month increase of CPI was mainly due to rising food prices, which contributed a share of about 0.24 percentage points to the month-on-month increase of the CPI according to our measurements and calculations.

Non-food prices rose 0.2 percent month on month, an increase basically equivalent to that of last month. The rise in food prices was mainly due to the rise in the prices of eggs, fresh vegetables, pork and chicken. High temperatures were the main reason for the decline in egg production, which explained a month-on-month increase of egg prices by 16.2 percent. High temperatures and rainfall as well as strong convection weather increased the costs for storing and transporting fresh vegetables, and which led to a month-on-month increase of egg prices by 8.5 percent.

The price of chicken and pork rose by 3.0 percent and 1.3 percent respectively. The CPI rose by about 0.32 percentage point under the influence of the above four items. You are concerned about the trend of the CPI and whether its change will lead to inflation, I think the answer is no, because the CPI increased by only 1.5 percent from January to August, and the food supply is relatively adequate at present. This year, the summer crops and the early season rice yield are greater than last year, and the autumn crops are growing well so far.

Therefore, the overall supply of agricultural products is relatively adequate, and thus, food prices will not increase much. Moreover, the prices of industrial consumer goods showed a relatively low increase of 0.6 percent from January to August. Comparably, the prices of services increased by more by 2.9 percent, but under the continuous supply-side structural reform, the quality and level of services kept improving, so the prices were not supposed to show a large increase. Thus, overall, there will be no problem in fulfilling the objective of controlling price inflation for the whole year. Thank you.

Xi Yanchun:

The press conference ends up here. Thanks again for Ms. Liu Aihua, and thank you all.

By Li Xiaohua, Chen Xia, Wang Qian, Li Huiru, Li Jingrong, Huang Shan, Xu Lin, Yuan Fang, Guo Yiming, Zhang Rui, Cui Can, Gao Zhan, Zhang Jiaqi

Related

Go to Forum >>0 Comment(s)