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Prices to Level Off in October

Spikes in consumer prices are putting pressure on the government, but are expected to flatten by October 2004.

"The price hikes that started last January will continue and are expected to become stable in October," said Cao Yushu, spokesman for the National Development and Reform Commission (NDRC).

During a press conference organized by the State Council Information Office, Cao ruled out the possibility of excessive inflation in China, but said prices of consumer good will continue to rise through the end of third quarter.

The National Bureau of Statistics recently reported China's consumer prices were 4.4 percent higher in May than the same month of last year; the fastest price hikes in seven years.

The consumer-price index (CPI), a policy-makers' key gauge of inflation, rose year-on-year to 3.9 percent in urban areas and by 5.2 percent in the countryside.

"The indicators are not higher than the alarming international rate of 5 percent and are still under control," said Cao.