Inflation ! - Shops can't change price tags fast enough !

[GoFlyKiteNow]

Feeling Inflation’s Pinch, Chinese ’can’t change the price tags fast enough!'

A new wave of price increases has hit China. Cooking oil, liquor, and instant noodles have increased 10 to 20 percent. “We can’t change the price tags fast enough!” said a purchasing staffer in a Beijing supermarket.

“Take cooking oil for example, we get three or four notices a day to increase the price,” the staffer said to Hong Kong’s Apple Daily.

For consumers facing worsening inflation, an average family has to increase its budget by at least an equivalent of about a hundred U.S. dollars each month. A housewife who cooks three meals a day quickly feels the pressure.

One such victim of inflation is Liang from Guangzhou who has to cook for a family of six. Just last year, her family could eat heartily for 1,200 yuan (US$180) a month. This year she needs to spend 2,200 yuan (US$330) per month to maintain the same quality of meals.

A former deputy director of the People’s Bank of China, Wu Xiaoling, admits that, “In the past 30 years, we printed too much money to push for fast economic development.” She adds that to cope with the financial crisis, the central bank adopted an extremely loose policy for issuing currency.

Wu is currently the Vice Chairwoman of the Finance Affairs Committee of the National People’s Congress, and acts as the director of the Lujiazui International Financial Research Center of the China Europe International Business School.

The gobs of cash entering the Chinese market have to be absorbed. Some experts believe that last year the stock market absorbed a great amount of liquid currency when stock prices doubled. Then in the first quarter of this year, the soaring residential property market also absorbed some liquidity.

 

[Dreamer1]

Carrefour tangled up in instant noodle dispute - China.cn Homepage
Updated: 2010-12-14 11:33:58
　　
Food and beverage maker Tingyi Holdings halted shipments of its popular Master Kong noodles to French retailer Carrefour stores in the Chinese mainland Monday, due to unsolved issues on the annual price-agreement renewal.

http://en.china.cn/content/d916625,045ccd,1899_15505.html

 

[GoFlyKiteNow]

Carrefour tangled up in instant noodle dispute - China.cn Homepage
Updated: 2010-12-14 11:33:58
　　
Food and beverage maker Tingyi Holdings halted shipments of its popular Master Kong noodles to French retailer Carrefour stores in the Chinese mainland Monday, due to unsolved issues on the annual price-agreement renewal.

http://en.china.cn/content/d916625,045ccd,1899_15505.html

Inflation hit at 28-month high last month at 5.1%

The People’s Republic has begun to pay the price for its yuan policy, increased exports, and the cost of imports to fuel its PMI.


Read more: China Inflation Hits Multi-Year High - 24/7 Wall St. http://247wallst.com/2010/12/11/china-inflation-hits-multi-year-high/#ixzz188veZtwr

 

[Devil Within]

China's inflation was imported by US treasuries, once they ditch their US T-bills, they'll solve this problem.

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[saratogas]

Introduce them bar-coding and computerise systems...

 

[GoFlyKiteNow]

China Bumps Bank Reserves Ratio Again, Sixth Time This Year

Posted: December 10, 2010 at 1:14 pm

The People’s Bank of China has announced another 50 basis points increase in the country’s required reserves ratio for China’s banks. This is the sixth such increase in a year, and the third in a month. The PBoC did not raise benchmark interest rate, which currently stands at 5.56%.

The rise in the reserve ratio means the country’s largest banks will have to hold on to 19% of their deposits as a reserve. The new requirement is expected to force the banks to hold another $53 billion in reserves, according to Bloomberg.

Read more: China Bumps Bank Reserves Ratio Again, Sixth Time This Year - 24/7 Wall St. http://247wallst.com/2010/12/10/chi...tio-again-sixth-time-this-year/#ixzz1890ssw12

 

[Dreamer1]

China Bumps Bank Reserves Ratio Again, Sixth Time This Year

Posted: December 10, 2010 at 1:14 pm

The People’s Bank of China has announced another 50 basis points increase in the country’s required reserves ratio for China’s banks. This is the sixth such increase in a year, and the third in a month. The PBoC did not raise benchmark interest rate, which currently stands at 5.56%.

The rise in the reserve ratio means the country’s largest banks will have to hold on to 19% of their deposits as a reserve. The new requirement is expected to force the banks to hold another $53 billion in reserves, according to Bloomberg.

Read more: China Bumps Bank Reserves Ratio Again, Sixth Time This Year - 24/7 Wall St. http://247wallst.com/2010/12/10/chi...tio-again-sixth-time-this-year/#ixzz1890ssw12

The following is comment by professor Mike Pettis fr Peking U on 19 Oct 2010,it is still relevant.

The PBoC has just announced that it is hiking the one-year lending and deposit rates by 25 basis points. Here is what Bloomberg says:

China raised its benchmark lending and deposit rates for the first time since 2007 after inflation accelerated to the fastest pace in 22 months. The one-year deposit rate will increase to 2.5 percent from 2.25 percent, effective tomorrow, the People’s Bank of China said on its website today. The lending rate will increase to 5.56 percent from 5.31 percent, it said.

China’s inflation quickened to 3.5 percent in August, highlighting overheating risks that have prompted the government to curb credit and clamp down on the real-estate market this year. Higher interest rates may encourage inflows of speculative capital from abroad, complicating management of the fastest-growing major economy.

This is definitely good news. It increases household income by raising the return on savings, which is a necessary part of the rebalancing process. It (very slightly) reduces the incredible incentive to borrow money and splurge on manufacturing capacity, investment and real estate development. And it signals that the PBoC is concerned about overinvestment.

But it is a pretty small move and very late. The PBoC has been, very unwillingly I think, behind the curve on interest rates. Most of us believe the PBoC has wanted to slow investment growth and to raise rates for a quite a while now, but it isn’t easy to do so. One of the problems is that the economy – especially local and provincial governments and SOEs, not to mention the central bank itself – is so dependent on artificially low interest rates to remain profitable or viable, that even a small increase in interest rates can raise put pressure on cash flow and financial distress costs

Beijing hasn’t raised interest rates in nearly three years (December 2007), even though deposit rates are clearly negative and the lending rate may well be close to zero or even negative – depending on what you consider the right measure of inflation. There have been rumors about a rate hike for the past three weeks. Earlier this month Chen Long, my assistant at SWS, told me that the there was a lot of talk about a hike in the deposit rate some time this month.

We thought it would be very unlikely that the deposit rate would be hiked without an equivalent hike in the lending rate. The very wide spread between the two (306 basis points for one-year maturities, which does not take into account the typical maturity mismatch between depositors and borrowers) is the main part of a bank recapitalization process which many believe necessary to protect the system from an anticipated surge in non-performing loans.

But Chinese borrowers are too dependent on artificially low interest rates for their viability, so we felt there really wasn’t much room to raise the lending rate. Our conclusion: the PBoC might raise both deposit and lending rates by up to 25 basis points, mainly as a way of reversing some of the decline in real lending rates during the past year, but they wouldn’t be able to do anything more aggressive.

 

[Aussie Prick]

China's inflation was imported by US treasuries, once they ditch their US T-bills, they'll solve this problem.

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You are quite a funny guy. China only has 1.7 Trillion in US$ cash and long term debt. All they need to do is wait XX years for maturity and instead buy.......um...........uh...........oh that's right there is nothing else to buy to keep the yuan low because the Eurozone might break up while the Japs keep selling their currency to keep the cost of Hondas low in the USA.

Lets instead ask the Chinese when they will allow full convertibility of the Yuan so the Currency speculators can help themselves to China's 2.7Trillion in reserves.

Keep up the comedy, please.