China prepares measures to contain inflation

| November 17, 2010 | 0 Comments
China prepares measures to contain inflation

China’s Premier, Wen Jiabao, has announced his Government is preparing measures to deal with double-digit food price inflation.

While no details were provided, measures are expected to include price caps and subsidies.

A number of measures have already been introduced by the Government to control prices, such as hiking interest rates - the first time since 2007 such a move was made.

Last week, the National Bureau of Statistics (NBS) revealed the consumer price index rose 4.4% in October, up from 3.6% in September.

Not only was the rate higher than analysts had expected, it represented the fastest pace since September 2008 – at the start of the global financial crisis.

At the time, the Bureau said more needed to be done to control prices.

Inflation fears are always a concern of Chinese officials due to the potential for price rises to trigger civil unrest.

The concerns of inflation have resulted in heavy falls on Chinese stock markets with the Shanghai Composite Index losing around 10% in the last week alone.

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