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Chinese Menu: Is Beijing 'Playing Pick One Item from Column A and One Item from Column B' with Their Data?

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Kick Images | Photodisc | Getty Images
Flag of the People's Republic of China

An article in the China Worker, brings a general proposition into specific relief; namely, why the Chinese government fears rising food prices:

"'It's really something that can topple regimes, as we have seen in the Middle East.' This is the warning from economist Nouriel Roubini, discussing the surge in prices for fuel, transport and especially food, at last month's World Economic Forum in Switzerland. Roubini was just one of many voices at the annual capitalist gathering who warned that rising food and energy costs are fanning political unrest and could push the global economy back into recession."

"A similar warning was issued by economic columnist Paul Krugman in the New York Times (6 February). He called food price rises an 'important trigger for popular rage', adding that the climate crisis is an important factor: "The evidence does, in fact, suggest that what we're getting now is a first taste of the disruption, economic and political, that we'll face in a warming world"

And the data they cite—which appears to be far more granular than the aggregate roll-up number—is sobering:

"In China the official rate of food price inflation is 10.3 percent, but many believe this understates the true position. In January, grain prices rose 15.7 percent over a year earlier, fresh fruit by 34.8, and eggs rose 20.2 percent, according to the National Bureau of Statistics."

Once again, the issue of how the Chinese are calculating their market baskets from raw underlying data for inflation indexing purposes seems to be called into question.

And—once again—I can't quite see how the numbers add up the way the Chinese Bureau of Labor Services says they do.

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