China's CPI to remain below 4 percent in 2007: economist

According to China's National Bureau of Statistics, the nation's Consumer Price Index (CPI) will not be allowed to surpass 4 percent in 2007. The main gauge of inflation reached a 33-month high of 4.4 percent in June. In the first half of the year, the CPI rose by almost 2 percent from last year.

In the first half of the year, the price of food rose 7.6 percent compared to last year. According to chief economist Yao Jingyuan, the rising food prices are a response to a general price increase, as well as seasonal factors and natural catastrophes. Yao says that there is an oversupply of almost all foodstuffs in the Chinese market, except for pork meat.

In the second half of the year, macroeconomic controls will be put in place to curb the rise in food prices and keep the CPI from crossing the four percent threshold, Yao believes