May CPI statistics show China’s economy picking up   

中外金融机构：中国通胀前景温和 出口将进一步改善

(ECNS) – China's May statistics are pointing to a steady economic growth.

According to data released Tuesday by the National Bureau of Statistics, China's Consumer Price Index (CPI) rebounded to a four-month high of 2.5 percent, mainly on higher food prices.

The rate is well below the government's target of 3.5 percent for this year.

Wang Jianhui, head of the Shouchuang Securities Research Institute, said low inflation gives government the freedom to focus on easier monetary measures to prevent a sharp economic slowdown.

On Monday, China cut the proportion of deposits for some city commercial banks and rural banks by 0.5 percent, to free up less than 100 billion yuan ($16 billion) for lending,

Despite these fine-tuning measures, experts say a more drastic stimulus can be ruled out.

Cao Heping, economist and professor at Peking University, said the purchasing manager's index shows that a hard landing is out of sight and China's economy is picking up steadily.

China's official PMI has been above 50 (a reading above 50 means economic expansion) for three consecutive months, and the HSBC/Markit PMI has been getting close to 50.

Meanwhile, China's producer price index (PPI) fell 1.4 percent in May from a year earlier, as it did for more than two years. Chinese manufacturers are still grappling with price declines, prompting the government to ease their financial burdens.