Consumer prices

China's consumer prices fell 0.5 percent in October from a year earlier, the smallest drop since declines began in February. Producer prices went down by 5.8 percent, according to the NBS.

The slower-than-expected growth in consumer prices was largely the result of a sufficient supply of vegetables and fruit during harvest season in October, said Sheng. Food prices account for one-third of China's consumer prices.

Inflationary pressure

Some analysts have expressed concern that China's 4 trillion yuan (US$586 billion) stimulus spending package and its very easy liquidity conditions could add to inflationary pressures in the months ahead.

"Rapid money supply growth led to inflation in 2004 and 2008," said Michael Jones from the Riverfront Investment Group. "It could happen again."

He is predicting the rate of inflation could rise as high as 7 percent next year.

(China Daily November 12, 2009)