Half of Chinese residents say consumer prices are "too high and unacceptable", according to a new survey from the central bank.
It's the first time in three years that the majority of the 20,000 respondents from cities nationwide have deemed prices unacceptable. Since 2004, the dominant attitude has been that consumer prices are high but acceptable.
In the third quarter survey, 47.1 percent of respondents said they have felt the pinch of rising prices, compared with about 24 percent the same time last year.
China's inflation rate reached 6.9 percent in November, the highest in 11 years. Food prices, which make up a third of the consumer basket, rose by 18.2 percent.
Nearly seven out of 10 respondents forecasted that consumer prices will continue to rise.
Meanwhile, Chinese residents have shown an increased willingness to save rather than invest in falling stocks and funds. About 46.3 percent of those surveyed in the third quarter said "deposit interests" were acceptable. In the first-quarter survey just 39.6 percent demonstrated a willingness to save in banks.
When asked "What's your favorite asset to hold", only 35.8 percent of respondents in the third quarter said they opted to buy stocks and funds, compared to 40.2 percent in the second quarter.
Fluctuations in China's stock market, along with the central government's efforts to increase interest rates, reserve requirement ratios and other tightening measures, have quelled hunger for stocks and funds.
The entrepreneurs' confidence index dropped to 76.9 percent, as many believe the government will take further measures to curb economic overheating. The index was about 82 percent in the second quarter.
In the quarterly survey, about 40 percent of investors said they believe that production material prices will increase. And about 42.9 percent said they believe raw material prices will go up and 19 percent said sales prices will rise.
About 40 percent of surveyed enterprises said they are "in good condition" and have increased their profit-making capability. However, 25 percent of the enterprises said the loan policy is too strict and they have had difficulty handling capital flow due to limited access to banking finance.
(China Daily December 21, 2007)