In a fix

ACROSS Asia inflation is rising, largely because of higher food and energy prices. China's inflation rate surged to an 11-year high of 7.1% in January and looks set to climb further this month, after some severe snow storms. India, Indonesia, Thailand and Singapore all have inflation rates above 4%.
Central banks are reluctant to raise interest rates by much at the same time as America's Federal Reserve is slashing its rates, for fear this would attract foreign capital and push their currencies sharply higher. Stronger currencies would in fact help to reduce the price of imported food and energy. But instead, many governments are resorting to price controls and government subsides to curb inflation. India has long imposed price ceilings on a wide range of goods. Thailand, Malaysia and the Philippines are considering new price controls or subsidies. In January the Chinese government froze the prices of energy, transport and water, and announced that producers of essential food items, such as meat, grain, eggs and cooking oil must seek approval before raising prices.

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Inflation has become a huge problem forcing the chinese government to "monitor" food because most of inflation is being drivin by food and not by aggregate demand. The inflation rate is supposed to keep climbing with all the bad weather expected in the future.

China inflation hits 11-year high

Soaring food prices were largely blamed for pushing consumer inflation up to 7.1% last month, from 6.5% in December.
Inflation in China continues to rise despite higher interest rates and other measures by Beijing to keep the economy from overheating.
The worst winter for decades hit food supplies, sending food costs up 18%.
Massive snowfalls wrecked crops and killed millions of livestock.
But analysts cautioned that the severe weather was not the only factor behind rising food costs, and warned that prices could still increase further.

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Chinese inflation hit and 11 year high in January of 2008. Alot of this was caused by the major cold weather problems that they have been experiencing. The last all time high was in 1996 at 7.1%. The inflation rate is now 7.4%.

Fear that China will push up world inflation after prices rise 7%

Fears that China may export inflation to the rest of the world were heightened yesterday when Beijing announced the sharpest rise in the cost of living in 11 years.

With food prices rising rapidly following severe new year storms, the annual inflation rate in the fast-growing developing economy reached 7.1% last month.

Food prices were up 18% on January 2007 as blizzards took 7m hectares of agricultural land out of production and paralysed distribution systems across China.

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There are major concerns that the price rises in food in China will spread to the rest of the economy, which will be a problem for countries that import chinese goods. This will create pressure for the exchange rate of it's currency, the yuan, to rise even more.

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China growth reaches 13-year high

Increased exports and a boom in the construction industry helped the rapid expansion during 2007.

But officials warned that overheating remained a danger, despite a slight slow-down in the fourth quarter.

Inflation is also a serious concern, with many Chinese people hit by recent dramatic increases in food prices.

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Over the past year the Chinese economy has grown by 11.4%, which is its fastest growth rate reached in the last thirteen years. To control inflation, the government has introduced a range of price controls to help the prices of ordinary goods, particularly food, stay controlled.

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