News / Asia

Inflation Remains High in China

A Chinese couple takes a rest next to a new year decoration on displayed along a shopping district in Beijing, Feb 15, 2011
A Chinese couple takes a rest next to a new year decoration on displayed along a shopping district in Beijing, Feb 15, 2011

The latest data show inflation in China remains stubbornly high, putting further pressure on the government to continue efforts to cool down the economy.

Beijing is battling hard against inflation. Although the latest figures released Tuesday were not as high as forecast, the rate remains steep at 4.9 percent a year.

The increase comes despite moves in recent months to rein in the booming economy and soaring prices.

The National Bureau of Statistics data show inflation remains above Beijing's four percent full-year target.

Inflation is one of the government's biggest concerns as it threatens to eat away at the economy and erode public confidence. High inflation has in the past has contributed to social unrest - something the Communist government tries to contain.

Economist Paul Cavey from Acquire Securities in Hong Kong says the government has tried to bring inflation under control by controlling food supplies, raising interest rates and limiting loan volumes.

He says each carries risks of damaging economic growth. Cavey notes that more interest rate increases may not be the best option as they would see more money rush into China and put pressure on the yuan to appreciate faster.

"It is not like interest rates can't be moved at all," said Cavey.  "They have gone up a bit in the course of the last few months, and will probably rise a couple more times in the course of the next six months or so. But interest rates tend to be a little bit more sticky. The preferred control tends to be in trying to limit the volume of loans in the economy."

Rising food costs remain the biggest threat in the basket that makes up the country's Consumer Price Index. Food prices in January rose 10.3 percent.

With China's poorest families spending up to half their income on food, the rising cost of grain, fruit and other stables strains households.

The government has controlled the supply of vegetables and grains to cool inflation in the past. On Tuesday a Foreign Ministry official said the country has enough wheat reserves that the severe drought gripping the country's grain belt should not affect global prices.

Tuesday's data did not include real estate prices, which also have grown sharply over the past year, creating what many market analysts say could become an unsustainable bubble.

Some information for this report was provided by AP, AFP and Reuters.

You May Like

Video Experts Warn World Losing Ebola Fight

Doctors Without Borders says world is losing battle against Ebola, unless wealthy nations dispatch specialized biological disaster response teams More

Video Experts: Rise of Islamic State Significant Development in Jihadism

Many analysts contend the group - which grew out of al-Qaida in Iraq - has been rebuilding for years More

US-Based Hong Kongers Pledge Support for Pro-Democracy Activists

Democracy advocates call on Chinese living abroad to join them in opposing new election rules for their home territory More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Larger Than Life Chinese Lanterns Make Southern California Appearancei
X
Elizabeth Lee
September 02, 2014 8:57 PM
Chinese lanterns with a long history are lighting up in 21st century style at the Los Angeles County Fair in southern California. Visitors can see traditional lanterns that hang, but also lanterns in the shape of animals, iconic landmarks and many other objects, all created by artisans from a place in China known for its lanterns. Elizabeth Lee has the details from the fair in the city of Pomona.
Video

Video Larger Than Life Chinese Lanterns Make Southern California Appearance

Chinese lanterns with a long history are lighting up in 21st century style at the Los Angeles County Fair in southern California. Visitors can see traditional lanterns that hang, but also lanterns in the shape of animals, iconic landmarks and many other objects, all created by artisans from a place in China known for its lanterns. Elizabeth Lee has the details from the fair in the city of Pomona.
Video

Video Experts See Rise of ISIS as Significant Development

The Islamic State’s rise seems sudden. It caught the U.S. by surprise this summer when it captured large portions of northern Iraq and spread its wings in neighboring Syria. But many analysts contend that the group - which grew out of al-Qaida in Iraq - has been rebuilding for years. VOA's Jela de Franceschi takes a closer look at the rise of ISIS and its implications for the Middle East and beyond.
Video

Video Israel Concerned Over Syrian Rebels in Golan

Israeli officials are following with concern the recent fighting between Syrian rebels and government forces near the contested Golan Heights. Forty-four U.N. peacekeepers from Fiji have been seized by Syrian Islamist rebels and the clashes occasionally have spilled into Israel. VOA’s Scott Bobb reports from Jerusalem.
Video

Video Ukraine Schools Resume Classes, Donate to Government Forces

A new school year has started in Ukraine but thousands of children in the war-torn east are unable to attend because of ongoing clashes with pro-Russia rebels. In Ukraine's capital, patriotic education has become the norm along with donations to support injured security forces fighting to take back rebel-held areas. VOA's Daniel Schearf reports from Kyiv.
Video

Video US Detainees Want Negotiators for Freedom in North Korea

The three U.S. detainees held in North Korea were permitted to speak with foreign media Monday. The government of Kim Jong Un restricted the topics of the questions, and the interviews in Pyongyang were limited to five minutes. Each of the men asked Washington to send a representative to Pyongyang to secure his release. VOA’s Carolyn Presutti has our story.
Video

Video Turkmen From Amerli Describe Survival of IS Siege

Over the past few weeks, hundreds of Shi'ite Turkmen have fled the town of Amerli seeking refuge in the northern city of Kirkuk. Despite recent military gains after U.S. airstrikes that were coordinated with Iraqi and Kurdish forces, the situation remains dire for Amerli’s residents. Sebastian Meyer went to Kirkuk for VOA to speak to those who managed to escape.
Video

Video West Africa Ebola Vaccine Trials Possible by Early 2015

A U.S. health agency is speeding up clinical trials of a possible vaccine against the deadly Ebola virus that so far has killed more than 1,500 people in West Africa. If successful, the next step would be a larger trial in countries where the outbreak is occurring. VOA's Carol Pearson has more.
Video

Video Survivors Commemorate 70th Anniversary of Nazi Liquidation of Jewish Ghetto

When the German Nazi army occupied the Polish city of Lodz in 1939, it marked the beginning of a long nightmare for the Jewish community that once made up one third of the population. Roughly 200,000 people were forced into the Lodz Ghetto. Less than 7,000 survived. As VOA’s Kane Farabaugh reports, some survivors gathered at the Union League Club in Chicago on the 70th anniversary of the liquidation of the Lodz Ghetto to remember those who suffered at the hands of the Nazi regime.

AppleAndroid