Consumer price rises, especially in the cost of food and daily
necessities, are likely to continue in 2007 and those affected by
them are concerned about who is losing out.
According to a survey conducted by China Daily's website, www.chinadaily.com.cn,
between December 26 to January 2 on the consumer price index (CPI),
925 or 80.09 percent of the 1,155 respondents said they expected
prices would continue to rise in the new year.
Meanwhile, 174 or 15.06 percent believed the prices would
stabilize, and 56 or 4.85 percent did not comment.
National Bureau of Statistics figures showed consumer prices
picked up last November in China, with food prices recording the
highest rise.
The CPI, the main gauge of inflation, was up by 1.9 percent last
November from a year earlier, compared with a more modest rise of
1.4 percent in October 2006. At the same time, food prices
increased by 3.7 percent year-on-year, compared to only 1 percent
for non-food items. Cereals were up 4.7 percent, edible oil rose
6.2 percent, meat and poultry increased 7.6 percent, and eggs were
up 11.7 percent.
Netizens surveyed said the huge infrastructure investment in
China due to the nation's fast economic and social development and
the surging price of raw materials could account for the increased
cost of food and commodities.
"We have spent so much money on infrastructure projects such as
the Three Gorges, and will pay more for the coming railway
project," said Joseph, a netizen who was concerned retail prices
would go up dramatically and cause inflation. Another netizen,
Greatwall, said: "It (the CPI) will rise, but it will be less than
2.5 percent certainly manageable."
Most of those surveyed indicated they had felt the impact of
consumer price rises. "With prices rising at a pace faster than
incomes are growing, it hurts many particularly the middle- and
low-income groups," said one netizen.
Another respondent complained that the rising price of food hurt
ordinary residents. He said he hoped prices would not rise much
further in 2007.
"Our food staples such as rice suddenly cost more," said Apple,
adding that if price hikes continued it would affect the standard
of living.
Most respondents were concerned about whether farmers and the
rural poor would benefit from the price increases.
Dotti said consumer prices would continue to rise. "It is good
for the farmers, which is the target of our government," said the
netizen.
But Jemmie said: "I really doubt the rise in food prices will
benefit farmers directly."
Max said he thought most, if not all, revenue or profit from the
price hikes would end up in the hands of merchants and
distributors.
Another respondent was also concerned about whether farmers and
producers benefited from the increased prices.
"This is a key question. Otherwise, locals are making large,
well-known supermarkets very wealthy," said the netizen. "There is
nothing wrong with making hefty profits on a level playing field.
But if 90 per cent are losers then the authorities should take a
close look at the situation."
(China Daily January 5, 2007)