China shouldn't ignore the risk of deflation, or falling prices, in its efforts to prevent consumer prices from rising, the state-owned People's Daily said, citing a government economist.

　　"Supply still exceeds demand overall in China's market," Yao Jingyuan, chief economist at the National Bureau of Statistics, was quoted as saying by the report. Prices of industrial products are declining and the prices of services remain stable, even though food prices are rising, the report cited Yao as telling a forum in Beijing on Saturday. Slowing incomes and unemployment may curb inflation, the report said, citing Yao.