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Can China Afford 5% to 6% Inflation?

The Outlook Weekly of Xinhua published an article from an official, associated with the State Development Planning Commission who asked a question. Earlier some Chinese economists remarked that China might benefit from a moderate 5 to 6% inflation rate. The article disagrees. “Currently the Consumer Price Index is rising slowly, but the prices for consumer goods and monopolistic items are increasing at a rapid rate. If the target for an overall price increase is set at 5% to 6%, the so-called moderate increase, economic development and social stability would suffer  damaging consequences.

Source: Xinhua, July 5, 2010