An old worry nags again
Published September 13th, 2007
Rising prices alarm the Communist Party ahead of its five-yearly congress
CONSUMERS in China's cities have had it good for an unusually long time. During most of the past few years of double-digit economic growth, inflation--at least according to official figures--has been barely detectable. But data published this week show the biggest monthly rise in consumer prices for over ten years. Government officials are getting worried that China's happy spenders will turn angry.
The latest figures were higher than many had expected. The National Bureau of Statistics said that consumer prices rose 6.5% in August compared with a year earlier, up from 5.6% in July. Officials still insist that the recent price increases are not a sign of widespread inflation. So far, they say, the index is being driven up by food prices, particularly pork. If food is excluded the index rose by a mere 0.9% in August. But nerves are fraying. Inflation always scares the Communist Party. Hyperinflation helped its own rise to power in the 1940s; price increases fuelled the pro-democracy unrest of 1989. …
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