Inflation slows down, but food prices remain high
Beijing (AsiaNews) - China's inflation rate appears to be slowing down, thanks partly to the government's monetary policies; however, food prices continue to worry ordinary consumers and experts, for whom they are a real sore point feeding popular dissatisfaction and protest. Some analysts are also concerned that published data may not be accurate but rather part of government speculation on lower inflation.
Government figures show that consumer prices rose 3.4 per cent in April against 3.6 in March, below the government's 4 per cent annual goal. This would represent the third month inflation declined. By contrast, food prices rose 7 per cent last month.
Now financial experts hope to see China's central bank, the People's Bank of China, and the country's banks change direction, easing monetary policy to boost domestic growth.
Released yesterday, export and import data are not good, partly due to the slowdown in Europe and the United States. Exports have in fact dropped substantially.
Beijing must open up its domestic market, which could become the world's largest, and make it easier for families and business to borrow. This would, experts suggest, keep growth rates almost unchanged. However, it would also require changes to the country's labour markets (higher salaries and free residential mobility), which the authorities will not do.
The only step the government took was to reduce banks' mandatory reserve. Now financial institutions can lend more easily. At present, loans tend to go companies (often state-owned), businesses and individuals with connections with the Communist Party, and the government itself.
Higher food prices remain a big headache. Even though, the prices of some products are kept artificially low (like pork, a basic staple), 7 per cent food inflation remains a problem for the country's social stability.
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18/05/2021 15:30
