China's benchmark consumer price index (CPI) fell by 0.8 per cent in October 2002, and by the same amount over the January- October period, according to the National Bureau of Statistics. This was the 12th consecutive month of falling prices. Although prices for services increased in October, prices of goods generally declined. The biggest falls were seen in electronics and communications products, where prices were 16.2 per cent lower than in October 2001. Analysts blamed the fall on oversupply of many products caused by excess capacity in many industries and the lowering of tariffs following China's accession to the World Trade Organisation.
The producer price index, which measures the cost of goods as they leave the factory, slipped 1.1 per cent in October 2002 compared with the same month in the previous year. The index is seen as an indicator of future movements in consumer prices.