Consumer prices picked up in November, but this will not bring China out of the comfort zone of low inflation any time soon.

However, the widespread concern it caused among the masses implies that immediate policy responses are needed to cushion the poor against price hikes, particularly in their daily necessities.

According to figures from the National Bureau of Statistics, the consumer price index (CPI), the main gauge of inflation, was up by 1.9 percent in November from a year earlier, compared with a more modest 1.4 percent rise in October.

That consumer prices increased last month by the largest margin since January is surely a cause for concern. Though it is far from ready evidence that China is bidding farewell to low inflation, the fact in itself should alert policy-makers to new changes in the country's price trends.

For the national economy, the recent rise of the CPI does not amount to a significant change that could affect the conditions for growth.

Although consumption as a share of the gross domestic product has increased, it remains considerably low compared with investment and trade. However, as the CPI stands well below the target level of 3 percent, it is far too early for the policy-makers to consider measures against inflation.

Besides, there are also statistics that point to a contrary price trend. For instance, in November the industrial output producer price index increased by only 2.8 percent year-on-year, lower than the forecasted 3 percent.

The output of China's large industrial enterprises grew 14.9 percent from a year earlier to 793.6 billion yuan (US$101 billion) in November, a slight rise from October's 14.7 percent but still much lower than the 10-year record high of 19.5 percent in June.

Slowed industrial production means that the economy is cooling off steadily as the government's macroeconomic controls take effect.

But for Chinese consumers, the pressure of price hikes appeared to be much heavier than the CPI rise of 0.5 of a percentage point indicated.

In fact, food prices recorded the highest increase, up 3.7 percent year-on-year last month, as compared to only 1 percent for non-food items.

As a result, people who earn less are more than likely to bear the brunt of higher food prices. That is why Premier Wen Jiabao recently inspected Beijing's food markets to see if price rises have affected low-income families.

Wen called on local governments to ensure stable food supplies. Related departments have already auctioned millions of tons of grain reserves to feed market needs.

Such efforts to ease public worries over rising food prices are necessary. But it is more important to come up with measures that go with the grain of the market system to allow farmers to reap due profits from the current price hikes.

(China Daily December 15, 2006)