(Ecns.cn)--More than 60% of residents in Beijng said that consumer prices are unbearably high, according to a survey conducted by China's central bank, the Beijing News reported Tuesday.
About 1,400 Beijing families took the survey, which showed the Beijing consumer satisfaction index dropped to 18.1 in the second quarter of 2011, a decline of 2.8 points compared with the previous quarter. 64.3% of residents said that current consumer prices are unbearable, an increase of 4.5 percentage points from the previous quarter.
With the strong feeling of intolerable consumer prices, more Beijing residents chose to invest or save more money instead of spending. Only 21.1% residents chose spending, a decrease of 0.4 percentage points from the previous quarter; but, 43.2% said they will invest and 35.7% said they will save more.
Few people said they will purchase cars in the next three months, according to the report. About 41% of residents said they have plans to travel, which set a new record high since 2004. Only 12.5% of residents said they will buy cars.
In addition, over 50% of Beijing's residents predicted that the consumer prices will continue to rise over the next three months.
Pork prices rise to record high
Data from the National Bureau of Statistics (NBS) showed food prices, which account for about 30% of the CPI basket, have been driven up mainly by the pork price, which rose 11.7% in May and 11.5% in April, contributing 63.6% to the CPI.
Meanwhile, the price of pork had increased for 10 consecutive weeks by the end of June. The wholesale price of pork rose by 13.3% in June, from 22.17 yuan ($3.43) to 24.68 yuan a kilogram, according to the Ministry of Commerce.
The average wholesale pork price in Beijing has risen to 24.95 yuan a kilogram, which is the highest point in over the last three years, according to statistics released Monday by Xinfadi Wholesale Market, the capital's largest agricultural products wholesale market, Beijing News said.
Liu Tong, an official from the market's statistical department, said that pork prices may continue at a high level due to a lower pork price before and pig diseases that spread from 2009 to 2010. He predicated that the pork price may keep on rising, but will be limited as the consumption of meat products is entering a low season in summer.
Central bank: inflation pressure remains high
China still faces large inflation pressures, the People's Bank of China (PBOC), the nation's central bank, said Monday, China Securities Journal reported.
"Our economic growth is stable and relatively fast. But inflation pressures remain high," the Monetary Policy Committee under the central bank said in a statement concluding its second quarter meeting.
The central bank said it will closely watch movements in the domestic and international economies and financial conditions, and will implement the government's prudent monetary policy.
The PBOC will use a variety of policy tools to effectively manage liquidity and maintain a reasonable level of total social financing as well as money supply, the bank said.
"Economic and financial development still face complicated challenges," it said, adding that there are still many risks ahead as the global economy recovers.
Analyst: PBOC may raise interest rates in July
Analysts said the central bank may raise the interest rates, as it reiterated its "prudent" monetary stance in the statement, and that the country's inflation pressure remains high.
The country's consumer price index (CPI), a main gauge of inflation, is predicted to rise as high as 6.2% in June, 0.7 percentage points higher than the figure in May, a China International Capital Corp Ltd (CICC) report said.
The country is likely to keep a high inflation rate, between 4% and 5% annually, over the long term, Pu Yonghao, head of the Asia-Pacific Wealth Management Research and chief investment strategist at UBS Wealth Management and Business Banking, told the China Daily Tuesday.
Zhou Wenyuan, an analyst with Guotai Junan Securities, said the central bank's statement showed that future inflation may exceed expectations. He predicted that the June CPI may hit 6% and the PBOC may raise the interest rate in July, according to China Securities Journal.
The Agricultural Bank of China also said that the interest rates may be raised in July as rising pork prices continue to set high pressures on inflation.
However, the PBOC might not raise the commercial banks' reserve requirement ratio (RRR) in July because it may hurt the financial market and overcool the economy, said Li Xunlei, chief economist at the Shanghai-based Guotai Junan Securities.
China has raised the RRR six times since the beginning of this year in order to control skyrocketing prices, which has pushed some small and medium-sized businesses to turning to high-interest illegal lending.
