Pushed by food prices, China’s inflation accelerates
Consumer prices increased 4.5 in January. Chinese New Year celebrations push prices up by 10.5. The trend is a serious and constant threat to the Communist regime.
Beijing (AsiaNews) – Consumer prices in China rose by 4.5 per cent over a year earlier, the highest level in three months, China’s National Bureau of Statistics reported this morning. Food prices jumped 10.5 per cent. Experts expected the rate to remain around 4.1 per cent as in December. The trend is now raising concerns about possible social unrest.
Prices rose 1.5 per cent in a month, pushed by the cost of food, as ten days of celebrations for Chinese New Year began on 23 January, a time when families enjoy higher than average food consumption.
"It makes us more concerned that the risk of inflation is not going away," said Nomura economist Zhiwei Zhang. Among Chinese planners, "it will reinforce concerns about inflation that already were there." In addition, "In the short term, it also lowers the possibility of policy loosening," Zhang said.
The price spike could complicate Beijing’s efforts to revive growth that had slowed to a 2 1/2-year low of 8.9 percent in the final quarter of 2011. Chinese leaders have been trying to boost investments in real estate and infrastructure. Unemployment and inflation are two policymakers’ main headaches.
Indeed, inflation remains a major concern for Communist leaders. Higher prices and a domestic market distorted by export-oriented policies keep people on a permanent edge. Even slight increases can have serious consequences in a country where hikes in prices of rice and pork have already led to unrest.
Prices rose 1.5 per cent in a month, pushed by the cost of food, as ten days of celebrations for Chinese New Year began on 23 January, a time when families enjoy higher than average food consumption.
"It makes us more concerned that the risk of inflation is not going away," said Nomura economist Zhiwei Zhang. Among Chinese planners, "it will reinforce concerns about inflation that already were there." In addition, "In the short term, it also lowers the possibility of policy loosening," Zhang said.
The price spike could complicate Beijing’s efforts to revive growth that had slowed to a 2 1/2-year low of 8.9 percent in the final quarter of 2011. Chinese leaders have been trying to boost investments in real estate and infrastructure. Unemployment and inflation are two policymakers’ main headaches.
Indeed, inflation remains a major concern for Communist leaders. Higher prices and a domestic market distorted by export-oriented policies keep people on a permanent edge. Even slight increases can have serious consequences in a country where hikes in prices of rice and pork have already led to unrest.
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