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

    South Sudan Sends First Ever Official Olympic Team to Rio

    VOA caught up with Santino Kenyi, 16, one of three athletes who will compete in this year's summer games in Brazil

    Arrest of Malawi's 'Hyena' Man Highlights Clash of Ritual, Health and Women's Rights

    Ritual practice of deflowering young girls is blamed for spreading deadly AIDS virus

    Immigrant Delegate Marvels at Democratic Process

    VOA finds things Americans take for granted are special to foreigners

    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.
    Immigrant Delegate Marvels at Democratic Processi
    X
    Katherine Gypson
    July 27, 2016 6:21 PM
    It’s been a bitter and divisive election season – but first time Indian-American delegate Dr. Shashi Gupta headed to the Democratic National Convention with a sense of hope. VOA’s Katherine Gypson followed this immigrant with the love of U.S. politics all the way to Philadelphia.
    Video

    Video Immigrant Delegate Marvels at Democratic Process

    It’s been a bitter and divisive election season – but first time Indian-American delegate Dr. Shashi Gupta headed to the Democratic National Convention with a sense of hope. VOA’s Katherine Gypson followed this immigrant with the love of U.S. politics all the way to Philadelphia.
    Video

    Video A Life of Fighting Back: Hillary Clinton Shatters Glass Ceiling

    Hillary Clinton made history Thursday, overcoming personal and political setbacks to become the first woman to win the presidential nomination of a major U.S. political party. If she wins in November, she will go from “first lady” to U.S. Senator from New York, to Secretary of State, to “Madam President.” Polls show Clinton is both beloved and despised. White House Correspondent Cindy Saine takes a look at the life of the woman both supporters and detractors agree is a fighter for the ages.
    Video

    Video Dutch Entrepreneurs Turn Rainwater Into Beer

    June has been recorded as one of the wettest months in more than a century in many parts of Europe. To a group of entrepreneurs in Amsterdam the rain came as a blessing, as they used the extra water to brew beer. Serginho Roosblad has more to the story.
    Video

    Video First Time Delegate’s First Day Frustrations

    With thousands of people filling the streets of Philadelphia, Pennsylvania for the 2016 Democratic National Convention, VOA’s Kane Farabaugh narrowed in on one delegate as she made her first trip to a national party convention. It was a day that was anything but routine for this United States military veteran.
    Video

    Video Commerce Thrives on US-Mexico Border

    At the Democratic Convention in Philadelphia this week, the party’s presumptive presidential nominee, Hillary Clinton, is expected to attack proposals made by her opponent, Republican presidential nominee Donald Trump, to build a wall along the U.S.-Mexico border. Last Friday, President Barack Obama hosted his Mexican counterpart, President Enrique Peña Nieto, to underscore the good relations between the two countries. VOA’s Greg Flakus reports from Tucson.
    Video

    Video Film Helps Save Ethiopian Children Thought to be Cursed

    'Omo Child' looks at effort of African man to stop killings of ‘mingi’ children
    Video

    Video London’s Financial Crown at Risk as Rivals Eye Brexit Opportunities

    By most measures, London rivals New York as the only true global financial center. But Britain’s vote to leave the European Union – so-called ‘Brexit’ – means the city could lose its right to sell services tariff-free across the bloc, risking its position as Europe’s financial headquarters. Already some banks have said they may shift operations to the mainland. Henry Ridgwell reports from London.
    Video

    Video Recycling Lifeline for Lebanon’s Last Glassblowers

    In a small Lebanese coastal town, one family is preserving a craft that stretches back millennia. The art of glass blowing was developed by Phoenicians in the region, and the Khalifehs say they are the only ones keeping the skill alive in Lebanon. But despite teaming up with an eco-entrepreneur and receiving an unexpected boost from the country’s recent trash crisis the future remains uncertain. John Owens reports from Sarafand.
    Video

    Video Migrants Continue to Risk Lives Crossing US Border from Mexico

    In his speech Thursday before the Republican National Convention, the party’s presidential candidate, Donald Trump, reiterated his proposal to build a wall along the U.S.-Mexico border if elected. Polls show a large percentage of Americans support better control of the nation's southwestern border, but as VOA’s Greg Flakus reports from the border town of Nogales in the Mexican state of Sonora, the situation faced by people trying to cross the border is already daunting.
    Video

    Video In State of Emergency, Turkey’s Erdogan Focuses on Spiritual Movement

    The state of emergency that Turkish President Recep Tayyip Erdogan has declared is giving him even more power to expand a purge that has seen an estimated 60,000 people either arrested or suspended from their jobs. VOA Europe correspondent Luis Ramirez reports from Istanbul.
    Video

    Video Calm the Waters: US Doubles Down Diplomatic Efforts in ASEAN Meetings

    The United States is redoubling diplomatic efforts and looking to upcoming regional meetings to calm the waters after an international tribunal invalidated the legal basis of Beijing's extensive claims in the South China Sea. VOA State Department correspondent Nike Ching has the story.
    Video

    Video Scientists in Poland Race to Save Honeybees

    Honeybees are in danger worldwide. Causes of what's known as colony collapse disorder range from pesticides and loss of habitat to infections. But scientists in Poland say they are on track to finding a cure for one of the diseases. VOA’s George Putic reports.

    Special Report

    Adrift The Invisible African Diaspora