Chinese inflation getting out of control

Chinese consumers are suffering great pain from rising food and property prices, as indicated by the following excerpt from the Business Times of Singapore. Increasing the value of the renminbi would help.

"Published November 8, 2010

Chinese consumers feel pinch of inflation
Woes exacerbated as wage increases lag leaps in prices of food, property


By FELDA CHAY


(SINGAPORE) China's interest rate hike may have struck economists as unexpected, but it comes at a time when domestic consumers are becoming increasingly frustrated over soaring food and property prices, and it's not just those at the lower end of the economic spectrum.


'A normal meal in the financial district can now cost 20 to 30 yuan, and when they increase prices it can go up by 10 yuan at one time,' said a lawyer working in Shanghai's Lujiazui financial district, who declined to be named.

'Basic commodities such as pork and sugar are all selling out,' he said. And vegetable prices have soared and look nowhere close to returning to earth. 'For people who are used to buying vegetables at three jiao (30 cents) and it increases to eight jiao, it's a big deal.'

According to China's National Bureau of Statistics, prices of fresh vegetables shot up 19.2 per cent in August this year from a year earlier, and annual inflation rose to 3.6 per cent in September - a 23-month high. Pushing the index up were food prices, which were 8 per cent higher than a year earlier and make up one-third of the overall consumer price index.

What has worsened the problem is that wage increases for some have lagged leaps in the prices of basic commodities."