1.The price of pork
While many China-watchers fret about the consequences of a collapse of China’s stockmarket, Wen Jiabao, the prime minister, seems more worried about the risk of social unrest as a result of the rocketing price of pork. A 50% rise in the average nationwide price over the past year is causing squeals of alarm. Last week Mr Wen went so far as to visit a farm to show he is taking the issue seriously.
Mr Wen promised that the government would act to ensure adequate supplies of pork; if necessary, to stabilise prices it can release stocks from its strategic reserves of both frozen pork and live pigs. Pork is China’s staple meat. The average person eats more pork than in any country other than Germany. But it accounts for almost 4% of China’s consumer-price basket, against less than 1% in Germany. Rising pork prices could therefore push up China’s inflation rate over coming months. Jiming Ha, chief economist at China International Capital Corporation, estimates that inflation will rise to 3.4% in May, from 3% in April.
2.Inflation
"China faces the potential risk of drastic economic fluctuation, while tackling the biggest challenges of soaring prices amounting inflationary pressure",Premier Wen jiabao said on Tuesday.
"We need to blaze a trail in between", he said at the Press Conference after the closing meeting of the first session of the Eleventh national People's Congress. Wen, who is reappointed premier on Sunday, said "this government will ensure rapid and stable economic development and at the same time to effictively hold down inflation and address problems of unstable, uncoordinated and unsustainable development".
Secondly, he said that the Chinese Government need the courage and determination to further free people's mind in order to make new breakthroughs in the form of economic and political systems.
Thirdly, he said it is important for the government to strengthen social justice and equity, which means to respect everyone, protect the lawful rights and interests of all and ensure everyone enjoys equal opportunities for development. "If the development of economy and the improvement of people's livelihood are the bounding duties of the government, then the promotion of social justice and equity is the conscience of the goverment".
The premier also stressed cultural advancement and higher ethical standards in China, including higher credibility, integrity, tolerance, fraternity and morality."To ensure this country will become stronger and more prosperous, to build a society of equity and justice, to ensure the people live a happy life, our children can go to school and our nation is duly respected in the international community, I'm willing to dedicate myself wholeheartedly to this cause," he said.
In his government work report to the NPC session, Wen said the country was facing "increasing inflationary pressures" and the task of holding down inflation was "difficult".
"The current price hikes and increasing inflationary pressures are the biggest concern of the people," he said.
Last year, China's consumer price index (CPI), a barometer of inflation, rose by 4.8 percent year-on-year, the highest since 1997 and well above the government target of 3 percent.
A week after Wen announced the country's goals to keep inflation at around 4.8 percent, the National Bureau of Statistics said last week inflation climbed to a nearly 12-year high of 8.7 percent in February, driven by a 23.3 percent jump in food prices.
The year 2008 may be the most difficult year for China's economy, Wen said. "It will be harder to make decisions." |