. }% v* O0 r! v: [Rising food prices could signal stubborn inflation in China# m2 G& z8 m4 ^/ O$ r
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Government officials say the rising food costs are due to badweather, but some economists say an economic policy that encourageslending and spending has caused inflation. , S8 A& b" M3 W( \3 F/ m9 L1 e
|" Q* E; |2 e; y& G: c. \“The major driving force for Chinese inflation is the extremely expansionary monetary and credit policy,” says Xiang Songzuo, senior fellow at the International Monetary Research Institute in Beijing. “That was bound to create inflation.” ' f% |' N% v5 o. O; a! u( g3 L" a3 L3 h+ M7 j b 3 ]% I% a _! Z" r# KA vendor displays vegetables at a local food market in Shanghai, on Dec. 11. Chinese inflation soared past forecasts to a 28-month high in November and showed signs of spreading beyond food costs, putting pressure on the government to ratchet up its monetary tightening.
