Living in China: Inflation slows urban Chinese income growth

Urban Chinese saw their disposable income expand 3.4 percent in the first quarter of 2008, the lowest increase for the same period since 1997.

The per-capita disposable income of the country’s urban households rose 11.5 percent year on year in the first three months to 4,386 yuan (about US$ 626.6). However, after counting in inflation, the growth slowed to 3.4 percent, the National Bureau of Statistics (NBS) announced on recently.

The growth reflected a deceleration of 13.2 percentage points compared with the same January to March period a year earlier. It was the lowest first-quarter figure since 1997, when urban income edged up 1.2 percent amid high commodity prices.

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Zhang Xiaojing, an expert with the Institute of Economics of Chinese Academy of Social Sciences, said the government should try to increase people’s earnings with the commodity prices being at high levels, or the living standard would go down.

The statistics were based on the calculation of a NBS survey result, which covered 59,000 urban households nationwide.

China’s inflation, measured by the Consumer Price Index (CPI), was up 8 percent in the first quarter. In February, the index rose 8.7 percent above the same period a year earlier, a 12-year high, but eased to 8.3 percent in March.