Official interest rates and financial markets set the tone for the CPI as the main reason is not excessive.

<P> World Financial Report: http:// News, the official and financial markets set the tone for the consensus CPI data over the central bank will not raise interest rates target </ P> <P> U.S. stocks drop on Monday, repeated on three major indices closed near the .unchanged, the market waiting to see a number of economic data later this week, investor sentiment turned more cautious. .China announced in May consumer price index (CPI) rose by 3.4%, the early part of the message yesterday, dragged down the Shenzhen and Shanghai City, with every sale of land at the past, Hong Kong stocks fell, investors generally tend to underweight, dragging down the early part of the soft, .Mainland stock market turn down for the afternoon rise, and land sales in general, the market will see a rebound. .Hang Seng Index finally closed at 20,636 points yesterday, down up 20 points, breaking the recent land sales will fall fate; and state-owned enterprises also rose 13 points down, at 10,917.95 points, the overall turnover of 57.5 billion yuan. .Hong Kong stocks a lack of information as speculation continues to linger in the near future HSI 20500 points to 21000 points, stocks remain market-oriented city is not fried. .</ P> <P> Mainland food prices expected to push measures to stop </ P> <P> the Mainland in May this year, announced yesterday, the CPI data, and as the market expected the central bank of 3% above the inflation target, rose 3.4% .and the first 5 months total, CPI increased by 2.9%. .In a mature economy like the United States, whenever the CPI data rate of increase is too high, so that the central bank will raise interest rates shot a desire to intervene in order to make long-term economy to grow steadily. .CPI in the Mainland before the announcement, market participants also expect the central bank's target data will be higher than that, so yesterday's news in fact not surprising, while the Mainland is also a newspaper in advance briefing, in response to central bank Governor Zhou Xiaochuan on the earlier CPI .comments and interest rates, interest rate expectations for the market, speculation on cooling, so the stock markets yesterday, there was no significant fluctuations. .Although in the early part of the main stock index was down, but then rebounded 1.91% have been reported to 4271 points. .According to the National Bureau of Statistics data, in May food prices rose 8.3%, non-food prices rose only 1%, consumer goods, which increased by 3.9%, services rose 1.7%, housing rose 4%. .Obviously, last month, CPI rose above the target, so the focus and directed the focus of market analysis also point to food prices. .In fact, the recent China News is a social one on pork prices, and alerted to the Premier level, which ordered a halt earlier this week, the State also came the news of corn into ethanol fuel, bio-fuel to prevent over-crowding people .daily food supply. .</ P> <P> push tax incentives to encourage farmers to produce </ P> <P> Although the central bank this CPI data will not raise interest rates beyond the goal, it has become the consensus of the official and financial markets set the tone, but I believe .China will gradually have the measures against the introduction of higher food prices. .The basic principles of economics using a simple scrutiny, the price is supply and demand game come to, so from the supply side, it can be expected that the Government will encourage farmers to produce positive measures introduced to increase production, this reduction could be tax incentives to reduce production costs such as .the price of feed, fertilizer pesticides to improve the profit level, or raise the official procurement price and so on. .However, because plant breeding takes time, so I believe the next few months, the Mainland will increase food prices remain at high levels. .</ P> <P> slowly raising interest rates to curb inflation </ P> <P> the Mainland policy is to build a harmonious society, both stock and property markets in recent years, the case of overheating, although the Government intervened, but the means to still be considered to take measures to moderate .in order to avoid unnecessary turbulence, therefore, the current Mainland tax year deposit rate before interest, real interest rates Although lower than the CPI, to curb inflation is clearly into the important issue, but also really take into account many factors taken into account (in RMB .upward pressure on the stock and property markets, rural livelihoods, social stability), even if China really need to raise interest rates next to curb inflation, slow the pace of advance will still be the main theme. .</ P>.