China's consumer price index (CPI), a main gauge of inflation, fell to minus 1.6 percent year on year in February, the National Bureau of Statistics (NBS) said Tuesday.
This was the first monthly negative growth since December 2002 when CPI was down to minus 0.4 percent.
NBS said in a statement that the February figure did not represent a deflation problem in China, since the money supply was ample because of the proactive fiscal policy and the relatively easy monetary policy.
"We do face price downward pressure, but that cannot be translated into a deflation problem," said Zhang Xiaoji, a researcher with the Development Research Center of the State Council, a government think tank.
NBS said falling international commodity prices, led by the global financial crisis, contributed to the domestic price fall.
It is not unusual to see a price rise in February. Last February saw the unprecedented snow disaster, and the Spring Festival shopping spree, which helped push up the inflation index to a 12-year high of 8.7 percent.
NBS said the CPI in February was the same as that in January.
The CPI in the first two months dropped 0.3 percent from the same period last year, it said.
It is not surprising if the indices continue to fluctuate in the negative range in upcoming months, as both domestic and overseas demands have been dropping since late last year, said Wang Xiaoguang, an economist with the National Development and Reform Commission.
In addition, there was a market bubble in the commodity price rise in early 2008, he said.
Food prices, which account for about one third of CPI, went down 1.9 percent, while non-food products prices sank 1.2 percent.
China has set a full-year inflation target of 4 percent for 2009.
