BEIJING: The State Informaiton Center (SIC) forecast Friday, CPI (China’s consumer price index), the inflaiton main gauge, will go up by 3.8 percent in the fourth quarter. A NDRC (National Development and Reform Commission) think tank, in a report in China Securites Journal said that the CPI is likely to exceed the target of 3 percent.

The report said, “The steep rise in the prices of edible oil, sugar and cotton are the major impetus behind the higher figure”. A result of the second round of quantitative easing monetary policy of the Federal Reserve, the report noted “imported inflation will exacerbate”, as the weakening U.S. dollar, this will further push up the prices of the major commodities like crude oil, non-ferrous metal and gold.

In additon, there will be also a increase in the prices of water, natural gas and refined oil, as the government initiative towards saving energy and cutting emissions. It said, in this regard higher labor costs will also play a part in price rise. Earlier this month, the National Bureau of Statistics said, China’s CPI soared to a 25-month high of 4.4 percent year on year in October.

To needy families, to reassure consumers facing rising inflation and urged local authorities to offer temporary subsidies, China’s State Council Wednesday announced price control guidelines. China’s central bank raised benchmark interest rates last month and ordered banks to set aside more reserves on Wednesday in its latest effort to rein in liquiditys, to tame mounting inflation pressure. While taking measures to rein in inflation, the SIC also urged authorities to shift its monetary policy from relatively easy to prudent.