Consumer and home prices to rise
Print Edition
CHINA’S consumer prices and home prices may accelerate this year while more companies might go bankrupt as slower economic growth weighs on employment and income increase, the country’s top economic planner said in a report yesterday.
Consumer prices are likely to rise as food prices and the cost of services will increase, the National Development and Reform Commission said in a report published in the China Securities Journal.
But inflation is expected to remain mild amid a challenging economic slowdown and falling global commodity prices, the NDRC said.
China in early March raised the growth target for M2, a broad measure of money supply, to 13 percent this year from last year’s 12 percent.
Home prices are also expected to recover overall with larger cities leading the growth and smaller ones facing greater pressure of de-stocking, according to the report. China has cut deed tax and down payment requirement in cities without purchase restriction policies since the second half of last year in a bid to boost the home market in smaller cities.
From December to February, 37 cities, down from 49, saw year-on-year price decline for new homes, and the number of cities where prices had risen climbed to 47 from 39, data from the National Bureau of Statistics showed.
However, the NDRC warned that more companies may close this year amid an economic slowdown and slowing growth in profit, weighing on employment and salary increase.
Steel and coal mining companies will especially be impacted from the Chinese government’s determination to cut excessive capacities and relocate 1.8 million workers.
Industrial upgrading will also reduce demand for labor as manufacturers in technologically advanced regions increasingly replace their workforce with robots, according to the NDRC.
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