GF 323
CONFIDENTIAL
2
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the
year-on-year rate of increase in the index was 6.8% in
fourth quarter, while in the first three quarters the increase averaged at slightly below 5%.
the
4.
An even sharper acceleration in the inflation
rate was observed, when measured in terms of the Cost of Living Index for the major cities (2). In 1992 the index rose by 10.9%, in contrast to the increases of only 1.3% in
1990 and 5.1% in 1991. Nevertheless, whether in terms of
the retail price index or the cost of living index, the
current inflation rate in China is still some way below those prevailing in the late 1980s (3).
5.
While the upsurge in inflation has clearly caught
the attention of Chinese leaders, the general view is
manifestly that
continue with its
economic development
market-oriented
China
should
reforms
and
programmes, and that if any anti-inflation measures are to
(2) The Cost of Living Index measures the price movements of all goods and services consumed by the workers and their families in 35 major cities of China. It is roughly comparable to the Consumer Price Index in Hong Kong.
(3)
Year-on-year rate of increase
General Retail Price Index
(*)
Cost of Living Index for 35 major cities (*)
1986
6.0
7.0
1987
7.3
8.8
1988
18.5
20.7
1989
17.8
16.3
1990
2.1
1.3
1991
2.9
5.1
1992
5.4
10.9
1992 Q1
aaaa
5.0
11.0
Q2
4.8
10.2
Q3
4.8
10.5
Q4
6.8
13.2
1993 Q1
8.6
15.7
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