China’s Struggle With Inflation Continues as Price Index Rises
By DAVID BARBOZA
NYT
SHANGHAI — In the latest sign that China is still struggling to tame inflation, the government said Saturday that the consumer price index rose by 6.4 percent in June, the highest rate in three years.
Although analysts were expecting inflation to peak for the year in June, the figures are troubling, particularly because food prices rose 14.4 percent from a year ago, up from 11.7 percent in May, suggesting that Beijing may have a difficult time reining in rising prices.
The price of pork — a major food staple in China — rose 57 percent in June alone, making it the biggest contributor to inflationary pressure. Beijing is trying to slow growth in what is now the world’s second largest economy in the hopes of preventing inflation and high property prices from undermining an economy that has grown strongly over the last two years.
A $586 billion government stimulus package in 2009 and aggressive lending by state-owned banks, much of it aimed at investments in real estate construction and government infrastructure projects, have driven the economy during the last two years. But now, to moderate that growth, Beijing is trying to tighten credit by restraining bank lending and by raising interest rates.
(More here.)
NYT
SHANGHAI — In the latest sign that China is still struggling to tame inflation, the government said Saturday that the consumer price index rose by 6.4 percent in June, the highest rate in three years.
Although analysts were expecting inflation to peak for the year in June, the figures are troubling, particularly because food prices rose 14.4 percent from a year ago, up from 11.7 percent in May, suggesting that Beijing may have a difficult time reining in rising prices.
The price of pork — a major food staple in China — rose 57 percent in June alone, making it the biggest contributor to inflationary pressure. Beijing is trying to slow growth in what is now the world’s second largest economy in the hopes of preventing inflation and high property prices from undermining an economy that has grown strongly over the last two years.
A $586 billion government stimulus package in 2009 and aggressive lending by state-owned banks, much of it aimed at investments in real estate construction and government infrastructure projects, have driven the economy during the last two years. But now, to moderate that growth, Beijing is trying to tighten credit by restraining bank lending and by raising interest rates.
(More here.)
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