China's inflation rises on higher pork, vegetable costs

BEIJING (AP) - High prices for pork and fresh vegetables pushed up China's inflation in August, but to a relatively low 2 percent that leaves Beijing room to stimulate the slowing economy if needed.

The rate reported Thursday was an increase over July's 1.4 percent. That was due largely to a 3.7 percent increase in food costs, which included a 15.9 percent rise for fresh vegetables and 9.3 percent for pork.

Producer prices, measured as goods leave the factory, declined 5.4 percent from a year earlier.

Lower inflation leaves room for Beijing to boost the economy if needed with interest rate cuts or other measures with less concern about igniting politically dangerous price rises.

Analysts expect Chinese inflation to rise in coming months but to still-modest levels.

"The benign inflation outlook in China keeps the door open for Beijing to further ease monetary policy to support growth," said Commonwealth Bank of Australia economist Wei Li in a report.