China steps up inflation fight

The Chinese government now appears to see inflation as public enemy No 1 as it continues to take various measures to curb price increases with an eye to recent history that shows public discontent can soon grow to crisis proportions if the cost of daily necessities gets out of hand.

Steep inflation – 18.5% in 1988 rising to more than 25% in 1989 – was one reason people joined the 1989 student-led demonstrations at Tiananmen Square that ended with the bloody June 4 crackdown.
Despite increased supplies, China now also faces the prospect of further increases in living costs as global prices of crude oil and food surge. Prices of the country’s foodstuffs, which carry a 33% weight in the country’s consumer price index (CPI), rose 18.2% in November from a year earlier, pushing the CPI up 6.9% that month, the fastest pace since December 1996. Utility prices including water and electricity rose 5.6% year-on-year in the same month.

Asia Times