There is continuing inflation pressure in China, partly because of the amount of money coming into the country, and partly because it is expected that the yen will be revalued. The demand for credit is still strong after a record number of new loans made last year. Beijing has increased the amount of capital that lenders have to keep in reserve five times just this year. Interest rates have been raised for the first time in more than two years. Increased costs for food are worrisome for the more than 80 million people who live in parts of China that have been affected by disaster. China is actually one of 25 countries around the world that face a food crisis because of inflation.The slower pace of the current economic growth might stem the tide of inflation.
China’s Inflation: The Effect on Travellers
Prices are rising quickly in China due to inflation, so tourists can expect to see much higher prices when they purchase goods. The prices of almost 20 different kinds of vegetables, as well as apples, have risen by more than 60 percent. Meat prices have gone up ten percent. Food inflation is up to 10 percent in China, which is more than twice the usual rate. Stockpiles of soybeans and oil that have been held by the government will now be sold in an effort to keep prices from rising further. At McDonald’s restaurants, prices have risen for nearly everything on the menu. Travelers may want to bring their own toothpaste, shampoo and facial tissues rather than pay the inflated prices once they arrive in China.
