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Effects of inflation on consumers in China

0 Comment(s)Print E-mail CNTV, January 13, 2012
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For Chinese consumers, CPI is not just a number, but a source of pressure on everyday life. For much of 2011, they struggled with rising prices which climbed to a high of 6.5 percent in July.

And now they’re seeing some respite as the government’s policies to combat inflation has pushed the index down to around 4 percent. Next, we take a look at how this is affecting ordinary people in China.

Ms. Wu and her husband live in Shenyang, the capital of China’s northeast Liaoning province. Neither have jobs due to physical disabilities and rely on social welfare. Last year, they were often unable to afford pork because of its rapidly rising price.

Shenyang resident Wu Yan said: "We didn’t eat much pork (last year). Sometimes, I used a little bit when I cooked vegetables, just for seasoning."

To combat rising prices, the Chinese government made inflation its priority. From prudent monetary policies to increasing food supplies, a series of efforts were made at the national and local levels. In Liaoning province, the local government released pork reserves into the market when its price was too high.

Han Dongtai, director of Service Industry Committee, Liaoning Province said: "We supplied nearly 1.8 million kilograms of pork reserves within three months. The price was more than one yuan lower compared to market price. It did ease market prices and strengthened consumer confidence."

One consumer from Liaoning said: "It’s acceptable. The price is lower than it was in the summer"

Meanwhile, nearly all provinces in China, including Liaoning province, have connected social welfare programs to price changes. Almost 10 billion yuan subsidies have been provided to low income groups. Mrs. Wu has benefited from the policy.

Wu Yan said: "I plan to buy more meat and eggs. They can provide more nutrition to us."

And with the Chinese New Year approaching, these policies are providing relief to residents planning their dinner celebrations.

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