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Asia

Inflation Troubles Chinese Consumers

Inflation in China has witnessed its biggest jump in over 11 years, at just over 7 percent. The recent cold spell and heavy snow has driven up the food prices, according to government officials. Opinions are divided as to whether government regulation will be able to bring the prices down, as shopkeepers and their customers hope.

The prices of some staple foods in China have been rising rapidly

The prices of some staple foods in China have been rising rapidly

Times are tough on the streets of Shanghai. The butcher Tang has had a market stall on Wanhangdu Road for five years now but business has been waning since last summer.

“The prices for pork have doubled,” Mr Tang said. “There isn’t enough pork. Many farmers have given up pig breeding because it’s a risky business -- you have to invest a lot but there’s only limited profit. There are no state subventions -- it’s not the same for rice.”

And his colleague complained: “Our business has got more difficult. People are buying less because prices have risen. I wish prices would fall.”

Rising prices

But the opposite is happening. In January, consumer prices climbed by about 7 percent -- the highest jump in 11 years. Food prices were the most affected. Mr Tang’s customers know the government has now capped the prices for several food products and for fuel, but the measures are not yet noticeable.

“We buy less meat than before,” one customer complained. “This time, we didn’t even buy meatballs for Chinese New Year. Eggs and vegetables have become more expensive too. Chinese cabbage went up during the Spring Festival but it’s gone down again now.”

“Tofu has become more expensive,” said another. “Rice is still OK but cooking oil has also gone up.”

Less meat on plates

Shortly before Chinese New Year a kilo of meat cost just over four US dollars at the market on Wanhangdu Road. Tang the butcher has felt a noticeable change in the behaviour of his customers.

“Many people are eating half the meat they used to -- before, they could eat as much as they wanted. Even I eat less meat. It’s just become too expensive. It doesn’t matter to rich people. But it’s hard for people with low incomes. For a family with two or three people it can cost at least 15 dollars per day to eat.”

Tang’s colleagues and customers hope the prices will fall in spring. Some economists also think the central government’s measures to control prices will have an effect. However, other experts, from the Deutsche Bank for example, think the opposite is likely to happen -- they can see inflation reaching 8 percent in March.

  • Date 19.02.2008
  • Author DW Staff (act)
  • Print Print this page
  • Permalink http://p.dw.com/p/LsN7
  • Date 19.02.2008
  • Author DW Staff (act)
  • Print Print this page
  • Permalink http://p.dw.com/p/LsN7