The fundamental cause for rising food prices are the soaring housing prices, according to Yin Zhongli, official from the State’s think tank, the Institute of Finance and Banking, which is under the domain of the Chinese Academy of Social Sciences.  

He suggested, “Bad weather and international markets may have touched off the food price hike but the fundamental cause is soaring house values. Even when the weather improves, inflation is unlikely to improve. Housing prices driven by inflation are emerging.” He warns that if the housing prices remain unchanged, wages may double.  

“Unless the authorities provide low-income housing, the housing prices driven by inflation will persist for a long time.”

Source: Caijing, August 30, 2010
http://blog.caijing.com.cn/expert_article-151340-10445.shtml

More farmland will be lost as urbanization in China advances. The urban population, which is currently at 46.8%, will increase to 54% by 2015, to 65% by 2020, and close to 70% by 2030, according to Ma Xiaohe, Deputy Director of the State’s Academy of Macroeconomic Research under the National Development and Reform Commission. 

“Given the reality of more people and less land, so many people moving into the city will certainly require a lot of land … Furthermore, due to the urbanization process, more highways have to be built, water and utilities are a great part of what is needed, and public service facilities have to be set up. This, in turn, will reduce farmland even further.”  

He concluded that China is facing an unprecedented challenge in preserving farmland and preventing food shortages.

Source: Huanqiu, August 30, 2010
http://china.huanqiu.com/roll/2010-08/1058881.html