It is confirmed. China's inflation is the highest in the world, at least for the past two years. This should raise concerns over the tightening measures of the world's most populous country.
Chinese leaders have vowed to contain the inflation and ensure stable growth for the country but it remains to be seen what action will be taken.
An 11.7% increase in food prices was the main factor why the consumer price index jumped by 0.7% from October to November. Another increase in residential prices which amounted to 5.8% also accounted for the hike.
Fruits claimed the top spot in food prices with an jump of 28.1% year on year. Eggs, grain and oil take second to fourth spot respectively.
There are several reasons to this statistical change. One would be strong fiscal spending and that prices are still "affordable". However, this enlarges the danger of a backlash next year.
The bad weather also played a part. The price of vegetables went up but it is evident that non-veggies food were the main culprits this time. Vegetable prices had already started increasing few months ago.
Anyway, expect prices to be stable by the end of 2010 with government measures on the way to curb this annoying rising index.
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