China inflation continues to rise

Inflation continues to be a problem for the Chinese government, with real estate and food particularly affected. China releases figures for its economic performance in the first quarter.The GDP rose by 9.7 per cent, and The Inflation increased by 5 percent that's the fastest pace since 2008, despite government efforts to rein in prices.China raised key interest rates for the fourth time since October as it tries to dampen high inflation.The People's Bank of China, the country's central bank, said the quarter-percentage-point increase lifts the one-year lending rate to 6.31 percent and the rate for one-year bank deposits to 3.25 percent.

China Inflation Is Serious Concern

China Inflation Is Serious Concern : China's central bank announces second rate hike this year in bid to quell inflation rise , the fourth interest-rate increase in less than six months.. inflation is rampant in China, investors should be cautious as the government moves to keep prices in check.the RMB expected to appreciate China to Accelerate its Currency Appreciation .The People's Bank of China, the central bank of the People's Republic of China, raised its benchmark 1-year lending rate by a quarter point to 6.31%, and its rate on one-year bank deposits to 3.25%. The bank acted ahead of a report forecast to show that consumer prices increased 5.2% year-over-year in March, the highest level of inflation since 2008.



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Can China Contain Food Price Inflation?

Feb. 20 2011 |Chi Lo, CEO of HFT Investment Management, expects to see another 2-3 more RRR hikes and 2 more rate raises in the first-half of 2011. He tells CNBC's Martin Soong, Karen Tso & Sri Jegarajah that all these steps should be able to contain food price inflation.

How to play The China Inflation

China Inflation Accelerates, 3 Moves to Make Today .Tony Sagami tells you the three most important financial moves you can make to protect yourself from the ravages of a global inflationary cycle as well as the best asset classes to own going forward.

Inflation in China Hits a 28-Month High

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Inflation in China has reached its highest point in more than two years. It's driven mostly by the soaring food prices. Chinese authorities are trying to keep prices stable, but economists see no relief any time soon.

The Chinese National Bureau of Statistics announced on Saturday, China's inflation has soared to a 28-month high. The consumer price index rose by 5.1 percent year-on-year in November.

Food was the biggest concern, with prices rising 11.7 percent. Economists say inflation could be spreading to other sectors, with health care up four percent and house prices up 5.8 percent.

[Hu Xingdou, Professor of Economics, Beijing Institute of Technology]:
"China will experience a long-term inflation era. Price rises will be seen in sectors like real estate and asset prices, prices of raw materials, commodities, agricultural products and agricultural inputs will also rise rapidly."

Economists blame massive lending and billions of stimulus spending in reaction to the financial crisis.

China's central bank raised lenders' reserve requirements for the third time in a month to sop up some of the excess cash in the economy that is driving prices higher.

Chinese authorities also promised to take a hard line on the hoarding of food and other goods which they say is artificially driving up prices.

But many retired city dwellers still worry they will not have enough money to pay doctor bills if food prices keep rising.

[Ms. Wang, Beijing Resident]:
"For people like us who have retired, with low salaries, you can afford to eat as long as you don't get sick. If you have to see a doctor you soon won't be able to afford to eat."

High Inflation Sends China Food Prices Soaring

High Inflation Sends China Food Prices Soaring


As China experiences high inflation - with rates hitting four and a half percent - the price of produce at markets and retail outlets across the country has gone up drastically.

Chinese citizens are wondering how they will continue to afford to buy produce when staples like green peppers and carrots have tripled or quadrupled in price.

The Chinese regime promised to enforce price controls and to crack down on speculators, but those working the markets say the price hike is a vicious circle that leaves everyone out of money.

[Wholesale Merchant from Henan]:
"When I bought this green pepper I bought it at 0.9 yuan. Do you know how much it is here? If you bring it here, the price goes up to 1.1 to 1.15 yuan. When you sell it here, you can only sell it here at 1 yuan to 0.9 yuan. So I lose around 4,000 to 5,000 yuan."

Beijing resident Bi Guangsheng, is skeptical about the regime's ability to control prices.

[Bi Guangsheng, Beijing Resident]:
"The price level has not been controlled. The regime says one thing, but the merchants do not listen. If the regime adopts a policy, then merchants will work out countermeasures to deal with it."

China has had costly experiences with inflation before, with soaring prices followed by unrest and even the end of dynasties.

Fast Food Prices Hiked in China

Given rising food costs in China, some fast food outlets are passing on the price increases to their customers; others pledge to keep their prices stable for now.

Beijing Wary As Food Prices Jump

Food prices are soaring high in Beijing. People are spending more money on food, while their salaries have remained stagnant. Here's more.

The number one topic in Beijing's markets these days is not property, but runaway food prices.

For most Chinese citizens, food costs make up a big part of their overall expenses.

In many households, food takes up as much as 40 percent of spending budgets, and a 10 percent jump in overall food prices has cut deeply.

In larger cities like Beijing, prices for some basics like rice, cooking oil and vegetables have doubled in the past few months.

Meantime, residents point out, salaries have stayed stagnant.




[Ms. Zhang, Beijing Resident]:




"There is nothing here that has not increased in price. Carrots are up to 5.3 yuan, they used to be 1 yuan for 500 grams."

"How do we bear it? We can't bear it, our salaries are too low... it's not bearable."

Consumer prices rose to a 25-month high in October, led mainly by the food component.

Some residents like Ren Liangchuan, have even sought relief in neighboring Hong Kong.

[Ren Liangchuan, Beijing Resident]:




"It's definitely a bit cheaper, a lot of people think it is cheaper than the mainland. Also, there are more types of brands and that is an advantage."

China is threatening price controls, but has so far stopped short of naming actual measures.

This is partly because Chinese farmers benefit from higher prices.

Independent economist Andy Xie says Beijing risks unrest if prices are not contained.

[Andy Xie, Independent Hong Kong-based Economist]:




"Normally social crisis in China tends to start with inflation because the low income Chinese are savers and inflation tends to erode the value of their bank deposits. That causes social panic. What do I think? It's that it's showing up that people are hoarding household goods and that is a sign of social crisis."

At the current 4.4 percent, inflation is still well below early 2008 peaks.

But Beijing was surprised by the latest data, and some observers say officials are moving to show it's aware of the situation, and ready to act, if necessary.

China Inflation Fears

China Director Jennifer Richmond analyzes Beijing's increasing inflation concerns and possible repercussions for the government.