Economy seeing structural recovery, but domestic demand needs a boost

China's consumer price index rose 0.2 percent year-on-year and the producer price index fell 0.8 percent year-on-year in June, compared with respective 0.1 percent rise and 2.1 percent decline in the first half of this year, data released by the National Bureau of Statistics show.

This indicates China's prices are on a rising curve, with the CPI turning from flat in the first quarter to increasing slightly in the second quarter, and the decline in the PPI continuing to narrow. Prices have recovered somewhat, but they are still at a relatively low level, reflecting the weak demand despite emerging signs of economic recovery.

The increase of food prices has remained weak while nonfood prices have increased steadily. This is largely because of China's increased efforts to ensure the stable production and supply of grain and important agricultural products. China's grain output has stayed above 650 million metric tons for eight years in a row, and the self-sufficiency rate of the main grains has remained above 95 percent, ensuring stable overall supply of food at low prices. Nonfood prices rose 0.8 percent in the first half of the year, contributing to positive year-on-year CPI growth, while overall nonfood price increases were well below those in major economies.