China enterprises face worsening living conditions

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BEIJING, Sept 11 (Xinhua): China's enterprises face worsening living conditions as production costs keep on rising while downstream prices fall.
Latest official statistics show that the lopsided gap between PPI ( producer price index), which reflects production costs, and CPI (consumer price index), continues widening.
In August, the country's CPI climbed 4.9 per cent year on year while PPI rose 10.1 per cent, compared to July's corresponding 6.3 per cent and 10.0 per cent.
The August PPI-CPI gap of 5.2 percentage points, against July's 3.7, June's 1.7, May's 0.5, may narrow slightly if state price-setters follow correcting international oil prices to downward adjust domestic energy prices, according to domestic leading securities company CITIC.
In the near future, enterprises' profit margins are further squeezed, casting cloud on their financial performances in 2008.
Most of China's enterprises are in manufacturing sector. For those export-oriented manufacturers, whose bargaining power is relatively weak in the global industry chain, days are even harder because of the country's tightening measures on export.
Some experts suggest the government lower tax burdens of domestic enterprises.