Beijing (AsiaNews / Agencies) - Inflation could now be at 6% in China, almost double the already alarming official figures. This is the opinion, based on accurate data, of Michael Pettis, a professor of finance at Beijing University, but also of many other experts and government officials.
According to official figures, inflation was 3.3% in July, a 21 month record: already more than the 3% per year posted instead by Beijing as the official limit, but which was put down to the effects of phenomena such as recent floods, as well as with increased global food prices caused by the disasters that hit Pakistan, Russia and other countries. But everyday consumers are finding increases higher than 3.3% the cost of shoes and apparel was up by 50% in Shanghai compared to a year ago, fruit and fish have grown by over 20% in Ningbo (Zhejiang) and the list is long. The cost of housing, education and medical care have increased greatly, but official figures do not speak of this. According to a survey by the Economist Intelligence Unit, 84% of rural residents are "concerned" about health care costs, which according to official figures have grown only 2.8% this year. Among other things, analysts note that this figure does not include "gifts" to doctors and administrative staff to help obtain appropriate care. In big cities, home to tens of millions of migrants, prices of food and rent have sky-rocketed into double-digit increases. Analysts point out that millions of restaurants, cafes and beauty salons evade taxes.
Yu Yongding, an economist at the Chinese Academy of Social Sciences, tells the agency Bloomberg that "there was a jump in prices which is not revealed in data”.
Even more radical is Pettis, who wonders how a country that has grown by 10.3% in the second quarter of 2010, and must review the salaries of workers (experts talk of wage increases around 8.4% in 2010 to meet the shift the in consumer prices) sees prices increase by so few percentage points.
Furthermore this data is already the result of robust intervention by Beijing, which periodically releases its reserves of wheat, rice and maize onto the market to contain costs, from telephone to running water, electricity and fuel. Meanwhile, bank interest is still at 2.25% since November 2008 so they are now lower than inflation and savings are loosing value.
Underestimation of inflation may prevent immediate appropriate action, forcing the government to take radical measures and interventions on the cost of money or a currency appreciation. Also there is danger of mass protests in the country, if people can no longer keep up with the increased cost of living.
Among other things, China does not indicate which data it takes into consideration when calculating inflation, so official figures cannot be verified.
But Patrick Chovanec, Tsinghua University professor of business management, said on his blog that "in recent weeks, many official sources have made statements predicting with a clear and explained certainty that inflation this year ... will be just 3%”.