The cheap prices of Chinese products are not cheap comparing to 10 years ago, 5 years ago or even 12 months ago, from the Shanghaiist:
…Not surprisingly, surging food prices is the main culprit behind the latest headline number, up a staggering 18.2 percent: Fresh vegetable up 22.5 percent, eggs up 23.6 percent, cooking oil up 34.6 percent and pork/poultry up 49 percent. Ouch! Prices in other sectors are faring much better, with most to the upside, but less than 5 percent: Rent up 3.9 percent, utility up 2.2 percent and healthcare up 2.3 percent.
In related news, yesterday, the head of People’s Bank of China, Zhou Xiaochuan reiterated that the role of a central bank is to fight inflation, perhaps having seen an earlier copy of today’s CPI report. Maybe we’ll get another rate hike sometime this week. [Full Text]
