Tourists shop at a duty-free store in Haikou, capital of south China's Hainan Province, Aug. 18, 2020. China's island province of Hainan has recorded 2.49 billion yuan (about 360 million US dollars) in duty-free shopping by tourists in July. During the period, about 384,000 tourists visited the island, up 54.1 percent year on year. (Xinhua/Guo Cheng)

 
China’s consumer price index (CPI), the key indicator of inflation, stabilized to a 2.4 percent increase in August, down from the 2.7 percent gain in July, according to the National Bureau of Statistics (NBS) on Wednesday. 

The stabilization of inflation is down to resumed food supply in the market, as the flooding has been effectively contained, Dong Lijuan, a senior analyst with the NBS, said. Food prices increased 11.2 percent year-on-year in August, narrowing by 2 percentage points from July’s increase. 

Within the food prices, pork price jumped by 1.2 percent, pushed up by a recovery in demand, despite an increase in supply. Compared to the same period last month, the year-on-year gain of 52.6 percent in pork price in August is 33.1 percentage points lower than that of July.

Prices of chicken and duck dropped 1.6 percent and 0.9 percent year-on-year, the first decrease in three years.  

The producer price index (PPI) continued to improve in August, rising by 2 percent compared to a drop of 2.4 percent in July, indicating a rebound in production activities and market demand, Dong said. Domestic commodity prices were driven up by the rising price of crude oil and metals in the international market. 

“As the floods subdued from late August, agricultural production will return to normal and food supply will continue to increase in the coming months,” Tian Yun, vice director of the Beijing Economic Operation Association, told the Global Times. 

“And the return of the PPI to positive growth after months of contraction indicates the economy is improving and manufacturing activities are expanding,” Tian said.