TO THE POINT: Most of July's macroeconomic statistics have surfaced, all indicating robust investment and consumption as well as more trade surplus. The surging national economy also saw a sharp rise in the consumer price index (CPI), with its growth rate the highest in a decade. Domestic auto sales also increased significantly, but the number of domestic flights will be reduced due to the lack of skilled maintenance workers. Amid violent volatility in the Chinese stock market, the first financial derivative stock-index futures are expected to be traded on the mainland in September. By LIU YUNYUN

CPI Flying High

The CPI, a barometer for inflation, hit its highest point in a decade, rising 5.6 percent in July this year. Largely seen to be driven by accelerating meat and egg prices, the figure stood at 4.4 percent in June. Among foodstuffs, meat and meat related products reported the biggest increase in price, growing 45.2 percent, followed by a 30.6 percent hike in eggs, and 30.1 percent rise in cooking oil.

Concerns over inflation created jitters in the market due to expected government interventions such as the raising of interest rates or the reserve requirement ratio.

But Yao Jingyuan, chief economist with the National Bureau of Statistics (NBS), argued that the rising pork and egg prices were actually good for farmers if people viewed it from a farmer's perspective.

Yao said in recent years, the pork prices were kept at a low level, but the prices of grain and feed continued to grow. Therefore, raising pigs was not as appealing, resulting in the reluctance of farmers to raise pigs and protect them from diseases.

"The urban residents happily enjoy rising salaries and increasing bonuses, but who pays bonuses to farmers?" Yao contended. "The market plays that function."

According to NBS, 82 percent of the net growing income for farmers came from rises in food prices.

Meanwhile, in order to encourage farmers to raise more pigs, the Chinese Government has spent millions of yuan to kill pig diseases and has subsidized farmers who raise pigs.

Besides the accelerating food prices, growth of the producer product index (PPI), another measure of inflation, slowed slightly to 2.4 percent in July from June's 2.5 percent.

Yao ruled out the possibility of further inflation, but said it will take three to four months for pork prices to become stable.

Auto Industry Fast Track

Despite sharp price cuts and fierce market competition, the Chinese auto industry saw profits rise 65.79 percent in the first half of this year.

Major domestic automakers reported total profits of 30.21 billion yuan in the first half, an increase of 11.99 billion over the same period last year, according to statistics from the China Association of Automobile Manufacturers.

The top three automakers, First Automotive Works Corp., Shanghai Automotive Industry Corp. and Dongfeng Motor Corp., all reported revenues of more than 80 million yuan in the first six months.

Although ferocious price wars have devoured many of these profits, nearly all manufacturers enjoyed substantial profit gains. Guo Yong, an expert with the Beijing Asian Games Village Automobile Exchange, attributed the rising profit to economy of scale.

"The booming national economy, improved management and reduced expenditures are contributors to the profit harvest," said Guo.

Trading Stock-Index Futures

Stock-index futures, the mainland's first equity-based derivatives, will begin trading in September, according to the China Securities Regulatory Commission (CSRC).

The industry regulator, CSRC, issued licenses in August to more than 40 brokerages to trade on the China Financial Futures Exchange.

The Economic Observer reported that qualified foreign institutional investors (QFIIs) will be allowed to trade stock-index futures with a total amount of about $1 billion. QFIIs can open three accounts to buy and sell stock-index futures for themselves and their clients through mainland futures brokers.

The State Council said on August 10 that conditions for the introduction of stock-index futures in the mainland were "already in place," without giving a timetable for the start of trading.

NumberS of the Week 3 million There are 3 million households in the Chinese mainland whose annual income was over $25,000, MasterCard China reported. The report also showed that traveling is one of the favorite activities of this growing wealthy class. 90% According to the National Bureau of Statistics, nearly 90 percent of Chinese travelers don't buy insurance before taking a trip. The same figure in Japan was only 13 percent.

Flying Less

The General Administration of Civil Aviation of China (CAAC) stated on its website that a total of 336 domestic flights to and from Beijing Capital International Airport (BCIA) will be suspended from August 15 to October 27.