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China to keep inflation at around 3% in 2016

(Xinhua) Updated: 2016-03-05 09:55

China to keep inflation at around 3% in 2016

The toy section at a supermarket in Yichang, Hubei province. [Photo provided to China Daily]

BEIJING - China aims to hold this year's consumer price growth at around 3 percent, according to a government work report delivered by Premier Li Keqiang at the annual legislative session on Saturday.

The target is unchanged from that for 2015, but the consumer price index (CPI), a main gauge of inflation, only rose 1.4 percent last year, a six-year low.

Reasons behind low inflation include the economic slowdown and price slump of global commodities. Weighed down by property market downturn, industrial overcapacity and subdued global demand, the Chinese economy grew 6.9 percent last year, the slowest annual expansion in a quarter of a century.

Low inflation can hurt the economy as businesses and individual consumers would postpone purchases, anticipating even lower prices.

Data showed a pickup of CPI in January, but the 1.8-percent rise could not allay fears of persistent deflationary pressure as it was mainly seasonal factors such as higher food prices around the time of the lunar new year that caused the inflation uptick.

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