There are no signs of revolutionary ferment among the farmers unloading boxes of oranges and sacks of garlic in the warehouses of Beijing’s largest wholesale produce market.
But it is places like this that the Communist party is watching closely for evidence of spiking food prices that many believe could threaten its grip on power.
Every day thousands of trucks trundle into the Xinfadi （literally, and unimaginatively, “new wholesale place”） market in the south-west of the capital carrying heavy loads of vegetables, fruit and meat from across the country and beyond. It attracts?vendors?from across the city, many visiting at night to buy produce to sell in open markets and supermarkets closer to the city centre.
But a growing number of residents are also braving Beijing’s gridlocked traffic to stock up on wholesale food items as prices soar.
“We see more ordinary folk coming to buy from us because the prices of most things are going up so fast,” said Xu Juan, 30, as she helped unload the melons grown by her family and brought by truck from the north-eastern province of Liaoning. The melons were selling for Rmb13.6 （$2） a kilo, more than 17 per cent higher than six months earlier but still far cheaper than in the city.
“We’ve got no choice but to raise prices because all our costs are going up – wages, fuel, taxes, transport and even the fee to get into this market has gone way up,” Ms Xu said. “It’s one fee rising after another.”
In a country where the average household spends around a third of its disposable income on basic food, persistent food inflation of more than 10 per cent in recent months is a serious concern. While the benchmark consumer price index levelled off at 4.9 per cent in January and February, food prices accelerated in February to increase 11 per cent from a year earlier, and figures on Friday are expected to show a fresh spike in overall inflation in March, to well above 5 per cent.
This is bad news for the stability-obsessed government. Wen Jiabao, the premier, claims to check prices of rice, flour, pork and vegetables every day, and last month he said the government had made reducing persistent price increases its priority this year.
In the absence of democratic institutions or a formal popular mandate, the Communist party’s legitimacy depends to an extraordinary degree on its record as a competent steward of the economy and guarantor of rising living standards.
According to party orthodoxy, inflation plays an outsize role in the very existence of the People’s Republic. The nation was founded in 1949 after the Communists swept to power amid hyperinflation stoked by their Nationalist foes’ economic mismanagement.
Mr Wen was a top government aide in 1989 and has repeatedly warned in recent months that soaring prices, combined with rampant official corruption, pose the greatest threat to Communist party rule.
Some analysts have even cited government fears about the destabilising effects of inflation as one reason for the current crackdown on civil society and arrests and “disappearances” of lawyers, activists, artists and bloggers, including the artist Ai Weiwei.
On the economic front, attempts to bring down prices have been complicated by an enormous increase in bank lending ordered by the government in 2008 to boost growth in the global financial crisis.
Meanwhile, monetary policy profligacy in the US and elsewhere, combined with soaring oil prices, has made Beijing’s job even harder.
Despite the challenges, many Chinese economists predict that further interest rate hikes and policy initiatives such as price controls and subsidies will allow annual headline inflation to peak around the middle of the year at about 6 per cent.
“As long as people have faith in the government and the supply capacity can more than meet the real demand then hyperinflation cannot happen in China,” according to Huang Haizhou, chief strategist at Chinese investment bank CICC. “We don’t expect inflation will get out of control this year.”
2011-04-19 11:16 编辑：icetonado