Chinese say inflation too high, see better trend

A record 49.2 per cent of Chinese urban consumers think prices are unacceptably high, a quarterly central bank survey of households just released.

That was up from 47.6 per cent in the previous poll.

But only 48.9 per cent of those polled expect inflation to increase in the second quarter compared with 64.8 per cent who had expected a rise at the time of the previous survey, the People's Bank of China (PBOC) said.

It attributed the improvement in inflationary expectations to seasonal factors as well as to confidence in steps the government has taken to rein in inflation, which hit a near 12-yearhigh of 8.7 per cent last month.

The poll of 20,000 households was carried out in 50 cities in mid- to late last month.

A record 51.4 per cent of respondents said the current level of interest rates was appropriate, up from 46.3 per cent in the previous poll.

The central bank said 35.4 per cent of households judged that they needed to save more, up from 30.2 per cent, while 27.6 per cent expected to invest more in shares and mutual funds, down from 35.8 per cent in the fourth quarter of 2007 and 44.3 per cent in the third quarter.

"With stock market swings increasing, people's enthusiasm to invest is continuously declining," the PBOC said.