RISING PRICES in China are in danger of becoming a major political issue, after consumer prices hit a 25-month high in November and food inflation surged beyond 10 per cent.
The anger against rising prices has got the government trying to shore up growing discontent. Beijing says it will give €40 million in subsidies to 4.6 million poor people in central and western China affected by rising prices.
China’s central bank raised interest rates for the first time in almost three years in October and increased the reserve requirement ratio for banks twice in November. The government also adopted a series of administrative measures earlier this month to control the prices of daily necessities such as food products.
Brian Jackson, an economist with the Royal Bank of Canada, described price pressures as “uncomfortably strong”. In October, consumer price inflation hit a two-year high of 4.4 per cent.
A slightly tongue-in-cheek questionnaire on the Baidu online forum “Born in the 1960s” asked if inflation was “adding pressure to your life”.
The results showed that 12 per cent didn’t care, 24 per cent said it was an influence but could afford it for the time being, while 64 per cent said “I’m dying anyway, I can’t live this way any more”.
In the morning market of Tuanjiehu in Chaoyang district in Beijing, an eggplant cost 6 yuan (68 cents) a kilo, garlic costs 18 yuan (€2.05) a kilo and chilli cost 8 yuan (91 cents) a kilo.
Wang Jin (30), who works in a government office, reckons the current crisis will affect her future.
“I really think my earnings now are maybe even less than those blue-collar workers, and I cannot imagine how I am supposed to build a life with my husband,” she says.
It appears that the rules of the market always hold sway.
“Except for cabbage and ginger, which dropped a little in price these days, all the other vegetables are all expensive, even radish coast 4 yuan [45 cents] per kilogramme, this is crazy,” said Ms Liu and her husband as they wandered through the market.
The couple earn about 5,000 yuan (€570) a month back home and they have a higher standard of living than that of many of their compatriots.
“But in the last few months, the high price of products really made people nervous,” her husband said.
Dong Mushi (31) works for a state-owned company earning about €1,136 a month and is not sure which foodstuffs are most expensive.
“It’s a broader feeling that everything is becoming expensive now, and the money I earn is more and more inadequate. I also felt unsafe, like others, although it seems like middle-class people that have the appearance of a ‘fine’ life,” Mr Dong says.
