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Consumer Prices in China Hit Decade High


China is experiencing its highest consumer prices in more than a decade. As VOA's Heda Bayron reports from Beijing, escalating food costs are hitting the country's poor majority the hardest.

China's National Bureau of Statistics says consumer prices jumped 6.5 percent in August from the same period last year.

The poor are really feeling it with the cost of essential commodities soaring. A pig virus has sparked a nearly 50 percent surge in meat prices compared to August 2006. Cooking oil prices jumped 34 percent, while vegetables cost 22 percent more.

The government is moving to head off consumer anger and potential unrest before the October Communist Party Congress. It is issuing food subsidies to low income families and help to pig farmers.

Although non-food prices barely rose in August, economists like Stephen Green of Standard Chartered Bank in Shanghai, still expect China's central bank, the PBOC, to take measures to prevent spill over into the wider economy.

"The PBOC is … worried about the stock market and possibly even wage growth," said Green. "So we are expecting at least one more rate hike this year.""

The People's Bank of China raised interest rates four times this year to try to curb inflation.

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