China's inflation rate unchanged in July

BEIJING - China's consumer price index (CPI), a main gauge of inflation, grew 2.3 percent year-on-year in July, the same pace as a month earlier, official data showed on Saturday.

The growth rate was also the same as that of the first half of this year, showing stable pricing in the world's second-largest economy, according to the National Bureau of Statistics (NBS).

In July, inflation grew 2.4 percent in urban areas and 2.1 percent in rural areas, NBS data showed.

Food prices, which account for about one third of the weighting in the CPI calculation, grew 3.6 percent year-on-year in July, down from 3.7 percent in June.

The Chinese government aims to hold consumer inflation at around 3.5 percent this year.

Yang Hongxu, deputy head of the Shanghai-based E-House China R&D Institute, said the July inflation was "in a very comfortable range."

"Residents will feel the pain if inflation goes too high, but the economy and companies will suffer if it is too low. CPI at about 2 percent is an ideal level," Yang said.

The cooling housing market would also be conducive to ensuring steady consumer prices, he added.

Residential prices, which cover those for rents, utilities and building materials, grew by 2 percent year-on-year amid a weakening property sector.

NBS data showed that growth in property development investment slowed to 14.1 percent in the first half from 20.3 percent in the same period of 2013, and housing sales dropped 6 percent year-on-year in the first six months.

On Saturday, the NBS also released the producer price index (PPI), which measures inflation at wholesale level. The PPI dropped 0.9 percent year-on-year in July.

It had dropped for 29 months in a row, but the pace of decline has narrowed for four consecutive months, pointing to slight improvement in market demand for industrial products.

Factory prices of production materials went down 1.2 percent in July, contributing 0.92 percentage point to the PPI drop, while factory prices for consumer goods gained 0.3 percent.