MNI POLICY: NDRC:China to Keep Inflation Stable Amid Trade War

By Iris Ouyang

     BEIJING (MNI) - China has the capacity to counter the impact of a changing

external environment on its inflation, China's National Development and Reform

Commission said Thursday, against the backdrop of a trade war with the U.S.

     "There are some changes in both the domestic and external environments,

particularly an increase of trade protectionism," said Yue Xiuhu, director

general of the Pricing Division of the NDRC, adding that more fluctuations in

the international commodity market and financial market have significantly

increased uncertainties.

     "However, the domestic environment is the deciding factor," he said.

"China's inflation in the second half of this year will maintain stable growth

in a reasonable range, and we are fully capable of countering any effects caused

by the outside environment."

     Demand and supply of goods in the country remains balanced as the economy

is expected to remain stable and move in a positive direction, Yue noted,

shrugging off concerns that the ongoing trade war could cause a higher inflation

rate domestically.

     The accelerated upgrading of consumption and industrial production, the

growth of emerging new economic sectors, and the central government's

macro-control toolbox will ensure inflation remains stable, Yue added.

     The NDRC will closely monitor price changes in the market, and supervise

the changes to stabilize pricing. It will also provide subsidies to low-income

groups affected by related price changes, Yue stated.

     China will enhance quality and expand volume of consumption, particularly

in service consumption, and will also increase consumption of information

technology products and consumption in its vast countryside.

     The NDRC also said the country's retail sales growth would rebound after

the effects of short-term factors ease, such as delayed car purchases in May and

June due to lower tariffs on imported vehicles starting in July.

--MNI Beijing Bureau; +86 (10) 8532-5998; email: iris.ouyang@marketnews.com

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