The inflation rate in China was consistently increasing for
the last half of 2012, however January reports show a decrease in the CPI. Approximately
one year ago, the country’s inflation rate was 4% or higher. Food pricing
registered a slower rate of growth than in 2012 when the country was hit with
rough weather that brought about an increase in pricing. Though it is not the
only gauge, food pricing correlates with the estimated cost of living in China
and represents a large portion of a family’s expense. The government hopes to
see inflation rates drop to below 4% in 2013 and remain consistent with their
average 10% growth in economic behavior over the past three decades. This
expansion has propelled the nation to become one of the biggest economies with
a growing middle class. However, this rate is hard to maintain for such a long
period of time. Their economy must find a way to remain stable without the
recession in Europe and the United States having too much of a direct impact.
http://money.cnn.com/2013/02/08/news/economy/china-inflation-cpi/index.html?iid=SF_E_River
Economic growth at 8% is still a big number, considered where the economy was in the 90s. Even when the rate drops down, it does not mean China is in the dumps.
ReplyDeleteChina is also facing great wage inequality despite the rise in the middle class, which should be a concerning sign for any rapidly growing economy. China just became the leading nation in the trade of goods, which adds to its economic growth. With that said, China is extremely dependent on the U.S. and Europe, both being China's top trade partners. I think that it is a good point that China has to figure out ways to remain stable in this unstable economic environment as well as address some of the internal issues.
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