Consumer prices in China fell for the ninth consecutive month in November as growing competition among manufacturers of mobile phones and cars forced them to cut prices to attract customers. The consumer price index fell 0.7 per cent last month over the same month last year, easing slightly from a drop of 0.8 per cent in October, the National Bureau of Statistics said. For the first 11 months of the year, prices fell 0.8 per cent. The deflation was led by tumbling prices for telecommunications goods such as mobile phones, which fell 16 per cent. Prices for cars, buses and other vehicles fell 4.7 per cent. Economists said the price declines in manufactured goods meant that China's deflation was being caused by gains in productivity and efficiency rather than slowing domestic demand. 'Our view has always been that deflation in China was a result of productivity growth, not really consumer demand,' said Yiping Huang, an economist at Salomon Smith Barney. 'You can see for these manufactured products, particularly in the electronics sector, prices are still declining. In the so-called non-tradeable sector prices are still rising,' he said. The non-tradeable sector included prices for services, which rose 1.3 per cent last month, the bureau said, while costs for medical services rose 7.7 per cent and school fees rose 3.8 per cent. On the other hand, grain prices fell 2.2 per cent, and prices for clothing, shoes and other accessories dropped 2.9 per cent. Deflation in cities was slightly stronger than in the countryside. Prices in urban areas fell 0.8 per cent while costs in rural areas fell 0.4 per cent. Housing costs were unchanged last month.