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Chinese Try to Cope with Soaring Prices
By Wang Zhen
Nov 8, 2010 Last Updated: Nov 8, 2010
China on the slippery slope of hyper inflation ?
This has been a year of soaring food prices in China. Beginning with sharp price rises for beans, garlic, and ginger, now it’s cooking oil, apples, and pork.
The price for cooking oil in a Chongqing supermarket has gone up to over 80 yuan (about US$12) per bottle as of Oct. 20. (The Epoch Times) This has been a year of soaring food prices in China. Beginning with sharp price rises for beans, garlic, and ginger, now it's cooking oil, apples, and pork
Experts believe that China’s overall price rise is a result of the authorities’ overprinting of currency.
For the past two years, banks in China released 17.3 trillion yuan (about US$2.59 trillion) in new loans. Such an enormous amount of currency must be absorbed by the market. In 2009, the stock market value doubled and absorbed a great amount of liquid currency; and in the first quarter of 2010, the soaring residential property market also absorbed some liquid currency.
However, many metropolitan regions have recently issued limits for housing sales and have consequently cooled the market. New liquid currency is now eying agricultural products and other goods, which is the main reason for soaring prices.
Soaring Staples
The most popular phrase that Beijing residents use nowadays is “everything is going up.” In the Haidian market, very few vegetables cost less than 2 yuan (US$0.3) per jin (1.1 lbs) now. Only two kinds of vegetables are less expensive: tomatoes and cucumbers.
Most concerning is the price rise in rice. “It has gone up 30 percent for the past two months, from a little over 2 yuan [USD$0.3] a jin to 3 yuan [USD$0.45] a jin now,” said a Beijing resident.
It’s the same with name brand cooking oil, which has gone up about 20 percent. The National Grain and Oil Trade Center dumped 300,000 tons of edible oil from state storage onto the market on Oct. 20, trying to stabilize the cooking oil price, but the effect was limited.
The price rise of other agricultural products such as mung beans and garlic has had a cascading effect on apples: the price of apples produced in Shanxi and Shandong provinces has risen up to 30 percent.
Sugar was not exempted, going from 4,500 yuan (US$675) a ton to a historic high of 6,000 yuan (US$900) a ton by mid-October. As of Oct. 25, sugar costs more than 7,400 (US$1,110) a ton in some production areas and the price has fluctuated as much as 600 yuan (US$90) within one day.
Under these circumstances, many have started hoarding necessities. Beijing resident Ms. Sun said that based on experience, one could never go wrong by stocking up on cooking oil, flour, candy, snacks, liquors, towels, and even makeup. “I’ll stock it up as long as I can use it in the future,” she said.
By Wang Zhen
Nov 8, 2010 Last Updated: Nov 8, 2010
China on the slippery slope of hyper inflation ?
This has been a year of soaring food prices in China. Beginning with sharp price rises for beans, garlic, and ginger, now it’s cooking oil, apples, and pork.
The price for cooking oil in a Chongqing supermarket has gone up to over 80 yuan (about US$12) per bottle as of Oct. 20. (The Epoch Times) This has been a year of soaring food prices in China. Beginning with sharp price rises for beans, garlic, and ginger, now it's cooking oil, apples, and pork
Experts believe that China’s overall price rise is a result of the authorities’ overprinting of currency.
For the past two years, banks in China released 17.3 trillion yuan (about US$2.59 trillion) in new loans. Such an enormous amount of currency must be absorbed by the market. In 2009, the stock market value doubled and absorbed a great amount of liquid currency; and in the first quarter of 2010, the soaring residential property market also absorbed some liquid currency.
However, many metropolitan regions have recently issued limits for housing sales and have consequently cooled the market. New liquid currency is now eying agricultural products and other goods, which is the main reason for soaring prices.
Soaring Staples
The most popular phrase that Beijing residents use nowadays is “everything is going up.” In the Haidian market, very few vegetables cost less than 2 yuan (US$0.3) per jin (1.1 lbs) now. Only two kinds of vegetables are less expensive: tomatoes and cucumbers.
Most concerning is the price rise in rice. “It has gone up 30 percent for the past two months, from a little over 2 yuan [USD$0.3] a jin to 3 yuan [USD$0.45] a jin now,” said a Beijing resident.
It’s the same with name brand cooking oil, which has gone up about 20 percent. The National Grain and Oil Trade Center dumped 300,000 tons of edible oil from state storage onto the market on Oct. 20, trying to stabilize the cooking oil price, but the effect was limited.
The price rise of other agricultural products such as mung beans and garlic has had a cascading effect on apples: the price of apples produced in Shanxi and Shandong provinces has risen up to 30 percent.
Sugar was not exempted, going from 4,500 yuan (US$675) a ton to a historic high of 6,000 yuan (US$900) a ton by mid-October. As of Oct. 25, sugar costs more than 7,400 (US$1,110) a ton in some production areas and the price has fluctuated as much as 600 yuan (US$90) within one day.
Under these circumstances, many have started hoarding necessities. Beijing resident Ms. Sun said that based on experience, one could never go wrong by stocking up on cooking oil, flour, candy, snacks, liquors, towels, and even makeup. “I’ll stock it up as long as I can use it in the future,” she said.
