Economists in the Chinese government are contemplating raising interest rates this year, according to Chinese media reports. The interest rate adjustment is being considered in the wake of rising consumer prices and investment growth.
China's consumer price index (CPI) rose 3.2% year-on-year in January 2004 and December 2003. The CPI increase was the highest since April 1997, when it also rose 3.2%. Government economists said they perceived "early inflationary signs" and were concerned that further price increases would lead to a drop in consumer spending.
The CPI for 2003 rose 1.2% year-on-year.