CHINA said yesterday producer prices fell 1.7 percent year on year in August, recovering from a 2.3 percent decline in July and indicating an upward trend in consumer prices.

　　Producer prices, which measure prices at the factory gate and are watched as a key indicator of trends in consumer prices, fell a year-on-year 3 percent in the first eight months of 2002, the State Statistical Bureau said in a statement.

　　Producer prices have been recovering steadily in recent months in line with China’s accelerating economic growth, which was a robust 8 percent in the second quarter of this year.

　　China’s benchmark consumer price index, which cover a basket of goods and services from vegetables to school tuition, fell 0.7 percent year on year in August, rebounding from a 0.9 percent decline in July, earlier official figures showed.

　　Analysts say the economy is still haunted by deflation due to overcapacity and relatively sluggish consumer demand, but most expect the deflationary trend to ease gradually.

　　Producer prices of raw materials fell 1.7 percent year on year in August, picking up from a 2.6 percent dip in July, while those of consumer goods fell 1.8 percent, the bureau said.

　　Of 38 industries surveyed in August, 27 sectors, including textiles and manufacturers of electronic products and telecom equipment, reported falling producer prices, it said.

　　Domestic crude oil prices fell 3 percent year on year in August, rebounding sharply from a July dip of 8.7 percent, it said.

　　Gasoline prices rose 3.7 percent in August — the first monthly rise this year — while diesel prices fell 1.2 percent and kerosene prices were down 4.4 percent, it said.

　　(SD-Agencies)