Inflation Hits China Amid Surging Demand
During a trip to his favorite supermarket this month, Yu Maomei was surprised to find the shelves for cooking oil stripped nearly bare. When he returned the next day, the 68-year-old retiree figured out what had happened: The store had raised the price of cooking oil, and some customers had stocked up in advance.
In following days, Mr. Yu found that prices for pork, rice, green vegetables and even some seafood had also jumped. "Many of the goods I need for daily life suddenly became more expensive," says Mr. Yu, in a slightly worried voice.
Long mired in a spiral of ever-lower prices, China's economy is dealing with something else these days: price inflation. In the first nine months of this year, China's benchmark consumer-price index rose 0.7%, and many economists expect it to shoot well past 1% next year. (Producer prices rose a year-on-year 1.4% in September, China reported Tuesday.) The CPI rise is still mild compared with inflation in other countries -- and a far cry from the nearly 25% inflation that spread through China's economy in the early 1990s -- but it marks the first significant inflation China has experienced since 1997, showing how the nation's booming economy is creating demand not seen in nearly a decade.
Several factors are behind the climbing prices. Demand for raw materials such as steel, cement and rubber has soared, the result of economic growth that could reach 9% this year, and surging investment across the economy. Nascent supply bottlenecks in the agricultural industry have also raised prices.
No less important, economists say, is warp-speed growth in the amount of money sloshing through China's economy -- money supply is up more than 20% this year -- a phenomenon that fuels inflation by making more money available to spend. The return of inflation is significant because it spells the end of China's five-year bout with deflation, a fall in the general price level caused in China's case by tight credit, and an oversupply of goods ranging from rice to cellphones.
The result was a boon to shoppers, Chinese and foreign. Yet alongside the cheaper prices, a new fear emerged: of global price deflation. As China's exports filtered through the world market, so did concern that the country was spreading deflation, aggravating a problem already vexing some other countries.
Now, such fears are moving to the back burner.
Just how far inflation spreads in China has implications for a big question hanging over global financial markets: a potential revaluation of China's currency, the yuan. Washington is pressing Beijing to let the yuan strengthen, a move that would make Chinese exports less competitive. So far, Beijing has resisted.
But if prices in China continue to rise, the issue could become moot. Prolonged inflation would eventually erode the yuan's purchasing power, raising costs for Chinese manufacturers and making their exports less competitive. It would also fuel demand for cheaper raw-material and other imports, narrowing the nation's trade surplus. And as China imports more, it might help dispel its reputation as an unfair trader interested only in flooding the world with cheap exports.
"Inflation," says Yuan Gangming, a senior researcher at the Chinese Academy of Social Sciences, "would be a good way to relieve international pressure for a yuan revaluation."
Even so, economists say greater Chinese demand for foreign goods would provide little relief for foreign manufacturers of finished goods, particularly those competing against China. The reason: Many Chinese companies would likely use the nation's deep pool of low-wage labor as a way to cut prices.
For now, it's unclear to what extent inflation may grip China. Though personal incomes in the biggest cities are rising quickly -- by about 9% this year -- they are rising far more slowly in many other parts of the country, particularly the countryside. Uneven income growth hinders consumption, which has grown at almost the same 8% rate for five years.
Indeed, economists say inflationary pressure thus far is largely the result of demand for raw materials needed to build factories, roads and other infrastructure. Yet the surge in this type of investment, which accounts for 42% of China's economic growth this year, and surging bank lending -- up a year-on-year 23% in September -- is fueling concern that China's economy is becoming stretched. That in turn is prompting a debate within China's central bank over whether to cool things down by raising interest rates.
If rates rise, and demand for raw materials eases next year, China could be stuck with an old problem: vast new manufacturing capacity but fewer places to sell what the new factories make. That means prices could come down nearly as fast as they went up, Merrill Lynch economist Timothy Bond wrote this year.
Even so, most signs suggest that China has entered territory where price pressure is clearly tilted upward, not downward. Reinforcing this change is a different view of inflation among China's new leaders, particularly Premier Wen Jiabao, who appears to have decided, unlike his predecessor Zhu Rongji, that a measure of inflation is good for China. "The government is now willing to see inflation in the range of 2% to 3% a year," says Mr. Yuan, the Chinese economist.
Some foreign companies say they see opportunities to raise prices on their best products. Swiss agrochemical company Syngenta AG, for instance, recently started charging China's export-focused vegetable farmers more for crop-protection chemicals, because "they go straight for quality," says Karl Gutbrod, a Shanghai-based executive. John Mullen, regional chief executive of DHL Worldwide Express Inc., echoes that sentiment: "We're not seeing price declines at the moment," he says.
Because it can take 18 months for price increases to filter through China's relatively primitive economy, today's inflation figures reflect the pressures of early 2002. The upshot: If inflation spurts higher in coming months, Beijing may have no choice but to tighten credit, hindering its efforts to speed job growth, a top priority.
Inflationary pressure may be stronger than Beijing realizes. Though prices for finished goods continue to fall, the price of many services, such as health care and education, are rising fast.
Agriculture is another critical area. In the late 1990s, overproduction put downward pressure on China's most important farm product, grain. That has changed, leaving China on the verge of a grain shortage that is pushing up prices.
People like Mr. Yu, the retired worker in Shanghai, are already feeling the impact. With a monthly pension of just over $100, Mr. Yu says making ends meet wasn't easy when prices were falling. Now, with both food and medical costs rising, he says he is growing anxious. "Daily life is getting more difficult," says Mr. Yu, "It's a huge burden for retired workers."
通货膨胀降临中国
这个月，68岁的于茂眉(Yu Maomei,音译)在逛超市的时候，突然发现摆放食用油的货架几乎空了。第二天，当这位上海的退休工人再次光临超市的时候，他明白了事情的原委：超市的食用油涨价了，一些顾客因此提前抢购。
随后的几天，于茂眉发现涨价的不仅是食用油，猪肉、大米、蔬菜甚至海产品的价格都上涨了。"许多日常生活的必需品一下子都贵了很多。"
中国的物价长期以来一直处于下跌的局面，但最近却出现逆转的势头，通货膨胀正成为中国经济必须面对的新问题。在今年前9个月，中国的消费者价格指数(CPI)上涨0.7%，许多经济学家预计，明年的CPI增幅将突破1%。比起中国在20世纪90年代近25%的通货膨胀率以及其他国家目前的通货膨胀水平，这个幅度并不算大。但这是中国1997年以来首次出现的物价显著上升的趋势，快速增长的经济使国内需求达到了近十年来的高峰。
造成物价上涨的原因是多方面的。经济快速增长以及各行业加大投资刺激了市场对钢铁、水泥、橡胶等原材料的需求；刚刚出现的农业供应瓶颈则抬高了谷物等农产品的价格。
另外，经济学家们认为还有一个不容忽视的因素，那就是中国经济体系中的货币供应量陡然激增。今年迄今为止，中国的货币供应量增长了20%以上。货币供应量增长意味著可供支出的资金增加，这是导致通货膨胀的一个重要因素。最近出现的物价上涨之所以备受关注，是因为它标志著通货膨胀的卷土重来。过去5年中，从大米、水果到彩电、手机等主要商品供过于求，政府还实行信贷紧缩措施，共同导致了中国物价水平持续下滑，通货紧缩局面随之产生。
前些年的物价下滑使中国的消费者获益匪浅，而物美价廉的中国出口产品也让外国消费者得到了实惠。然而，在物价下降的同时，对全球通货紧缩的担忧也油然而生。随著中国的出口商品逐渐渗透至全球市场，不少人担心中国可能会将通货紧缩的种子散播到世界的各个角落，并使一些国家的通货紧缩问题进一步恶化。 如今，类似的担忧已经不值一提。
中国的通货膨胀究竟会演变到何种程度，对目前困扰全球金融市场的一大悬疑－－中国是否会重估人民币－－可以说不无启示。美国政府官员一直向北京方面施压，要求中国允许人民币升值，这将降低中国出口产品在国际市场的竞争力，使美国等其他制造业大国受益。但中国态度始终如一，对类似的要求一概回绝。
但如果中国的物价持续攀升，这个问题很可能被重新提上日程。长期的通货膨胀将最终削弱人民币的购买力，提高中国生产商的成本，最终降低中国出口产品的竞争力。它还会刺激对原材料和其他相对低廉的进口产品的需求，从而缩小中国的贸易顺差。而中国进口的增加可能有助于平息外界对其不公平贸易政策的指责。 中国社会科学院高级研究员袁刚明说，通货膨胀将是缓和要求人民币升值的国际压力的一个有效途径。
尽管如此，大多数经济学家认为，对外国商品的需求加大并不能真正缓解海外成品生产商的压力，尤其是那些同中国直接竞争的成品生产商，如美国的纺织品生产商。因为许多中国企业很可能采用它们屡试不爽的方式来生产出口产品－－那就是凭借该国大量的低成本劳动力，压低产品价格。
目前还不能预测这种通货膨胀趋势将在中国持续多久。虽然中国大型城市的个人收入快速增长(今年迄今为止增幅约为9%)，但许多其他地区－－尤其是农村地区－－的个人收入增长仍然缓慢。收入增长的这种不平衡现象将继续对消费造成影响，中国过去5年的年消费增长率一直保持在8%左右。
袁刚明等经济学家认为，目前为止，中国的通货膨胀压力主要来自对投入工厂、道路和其他基础设施项目建设的原材料和其他商品的庞大需求。今年迄今为止，这些基础项目投资在中国整体经济增长中占42%。而9月份银行信贷也较去年同期增长了23%。基础项目投资和银行贷款的激增引发了对中国经济增长过热的担忧，中国央行因此正展开新一轮讨论，以考虑是否通过上调利率来为经济降温。 美林(Merrill Lynch)经济学家蒂莫希?邦德(Timothy Bond)今年早些时候在一份报告中称，如果利率最终被上调，且对原材料的需求明年也放缓，那么中国可能又会面对产能过剩的老问题。这意味著物价很可能迅速回落，就像当初迅速攀升那样。
尽管如此，大多数迹象显示，中国现在已经步入了新的经济疆域，在这里，价格压力明显是向上的，而不是向下。强化这一变化反映出中国新一届领导人－－尤其是总理温家宝－－对通货膨胀问题的不同看法。温家宝似乎认为通货膨胀对中国来说不是一件坏事，这与前任总理朱
