China’s Pollution Battle Might Spark Inflation – Willie Pesek
From Bloomberg.com (link):
Rich nations aren’t used to the dark side of globalization. For them, the phenomenon tends to reduce costs, boosting corporate profits, securities markets and living standards.
Recently, wealthy economies have gotten a taste of globalization’s other side. High-paying jobs are migrating to cheaper locales, while demand from developing nations is driving up commodity prices. Nowadays, the Group of Seven nations have little control over global trends.
Things may be about to get worse, and Chinese pollution could be a catalyst.
As 2006 unfolds, global inflation could make an unexpectedly fast comeback. Surging prices for commodities from crude oil to copper to cocoa are one reason. Property booms from New York to Sydney are another. Yet pollution in China might put more upward pressure on prices than many investors anticipate.