With the Consumer prices index (CPI) going down to 4.9 percent in August, the China government can do more to stimulate economic growth as inflation is more or less under control.

According to new agency Xinhua reported on Wednesday, China consumer prices increased by an annual 4.9 percent in August, marking the fourth straight month of decline but the smallest increase in 14 months. 

The reading fell short of analyst expectation as they called for an increase of 5.2 percent.

With shrinking exports and fixed investment possibly leading to economic growth of less than 10 percent this year and 9 percent in 2009. Analysts expected Beijing may relax its lending policy, cut taxes and curb energy price rises to boost the economy, which will help China SME exporters substain their business in the near future.

 

China economy

 

Photo courtesy of Bloomberg.com/apps/news?pid=20601089&refer=china&sid=adjS_kGupsn0

     

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