Price Control Administration of Guangzhou Municipality released its analysis of Guangzhou's price situation for the first half year on July 19th. According to the analysis, there was a small rise in Guangzhou's price level in the first half year, with an annual increase of 2.2 percent in the General Consumer Price Index. June made the most single-month increase since March, 2005. Coupled with the international gold price rise, there was a 17.3 percent rise for gold decorations price in Guangzhou.

The service price had an evident rise with an annual increase of 3.6 percent, which was mainly caused by the price rise in liquid petroleum gas, tourism, and household services. Compared with the same period last year, the price of liquid petroleum gas increased 23.3 percent, tourism 16 percent and household services 15.1 percent.

The analysis noted that the evident price rise for household services lay in that material consumption was shrinking in the public's consumption expenditure while service consumption was increasing.  In the first half year, the service consumption expenditure per capita for Guangzhou residents reached RMB 2764.81, accounting for 35.6 percent of consumption expenditure. The rise for service prices in the first half year made 1 percent up for Guangzhou residents' general consumption price level, becoming the major driving force for the rise in residents' general consumption price level instead of food prices.

The Price Control Administration forecast that Guangzhou would maintain a fast developing trend in economy with a steady residents' general consumption price level. The expected control goal of 2006 could be realized and there would still be a small increase in the price of means of production.

According to the monthly accumulative data, there is a "U" turn change in residents' general consumption price level, with 2.7 percent increase in January, back to 1.7 percent for the first three months and scaled-up to 2.2 percent from January to June.

Editor: Yan