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Vegetable prices driving inflation, Kunming enacts price controls

By in News on

Kunming's economy has been going full steam ahead lately, growing faster than China's national rate. But this recent growth has put the city at the top of a less desirable list: the Chinese cities with the highest inflation.

The 4.4 percent growth in Kunming's consumer price index through the first 10 months of the year outpaced all of China's other medium to large cities, according to a release from the Kunming government.

Much of the increase is being driven by vegetable prices, which have risen in price across China by an estimated 31 percent over the past year.

Prices for many staple foods in Kunming including noodles, pork, cooking oil and eggs have also risen in recent months.

The Kunming government has recently enacted temporary price controls on a range of staple food items with the aim of containing inflationary pressures.

Retail chains are one target for the controls, which came into effect on December 3 and will continue through the end of February. The city has asked foreign retail chains including Walmart, Carrefour, Metro and Park 'n' Shop to file a report with the government two days before making any changes in food prices.

Other steps that the government is taking to try to control rising food prices include freezing retail prices for grain, cooking oil, meat, eggs, milk and noodles at pre-November 17 levels and setting limits on the gap between wholesale and retail prices.

Inflation in China is currently being stoked by a red-hot housing market, increased consumption and a larger money supply, among other factors.

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