MercoPress. South Atlantic News Agency

China’s rate of inflation slides in November to its lowest in 14-months

Food prices seem to be easing off

China's rate of inflation has fallen in November to its slowest pace in 14-months. Consumer prices rose at 4.2% compared with the same month last year, the National Bureau of Statistics said this week.

Inflation was at 5.5% in October, after hitting a three-year high in July of 6.5%. Food prices, following the new index have fallen in influence. Analysts said this creates more room for authorities to ease monetary policy and encourage economic growth.

The slowing pace of inflation allows Chinese authorities to turn their policies more towards growth, as Europe's crisis starts to affect Asia. China has seen demand for its products shrink, as consumers in Europe and the US cut back on spending as growth slows in those regions.

Manufacturing activity contracted in November for the first time in 33 months, data showed. These indicators have increased concern that China could be headed for a slowdown as well.

In what was seen as a shift in policy towards growth, China cut the amount of money banks must keep in reserve last week. It was an attempt to free up credit and encourage lending.

Policy makers are meeting this month to map out the direction for economic policies in 2012. China's economy expanded 9.1% in the third quarter, the slowest pace in two years.