China's consumer prices to remain stable in H2

China's consumer prices will remain stable in the second half of the year, with inflation likely to stay below 3 percent, according to experts. Tang Jianwei, an analyst with the Bank of Communications, said weak domestic demand, a prudent monetary policy and the possibility of falling prices in the global commodity market will prevent domestic consumer prices from increasing steeply. But Tang said China's consumer prices may rise at a faster pace in the second half due to a mild rebound in pork prices, a possible hike in energy and resources prices and rising rent and furnishing costs. The government has set a growth target of 3.5 percent for the consumer price index (CPI), a main gauge of inflation, for 2013. The latest official data has shown that the CPI grew 2.4 percent year on year in the first half, leaving room for economic rebalancing. Yao Jingyuan, a researcher with the Councilor's Office of the State Council, or China's Cabinet, said China has had a bumper summer harvest this year, laying a solid foundation for stable prices. Wang Yiming, deputy head of the Academy of Macroeconomic Research under the National Development and Reform Commission, said the CPI increase is not likely to exceed 3 percent in the second half. As for July's inflation, experts predicted that the CPI may rise around 2.8 percent. Data from the Ministry of Commerce and the National Bureau of Statistics showed that prices of poultry, vegetable, seafood and soybean products have all been on an upward trend since mid-July due to high temperatures. Li Huaijun, an analyst at First Capital, said food prices are expected to contribute 1.7 percentage points to the CPI increase, while non-food prices will likely contribute 1.1 percentage points, adding that inflation will likely reach 2.8 percent in July. A report from CITIC Securities said July's CPI is likely to increase 2.7 percent over the same period last year and 0.1 percent over June.