Newspaper article The Christian Science Monitor

People Try to Make Ends Meet as China Aims to Curb Inflation

Newspaper article The Christian Science Monitor

People Try to Make Ends Meet as China Aims to Curb Inflation

Article excerpt

WANG ZHENGWEN usually buys a box of chewy mooncakes for each of her three sisters for this week's Mid-Autumn Festival in China.

But this year, the Beijing housewife says her sisters will have to share a single box of mooncakes. The price has almost doubled to $5 a box since last year. "How can you celebrate properly when prices are so high?" Ms. Wang asks as she shopped in a crowded Beijing market.

As the government tries to rein in accelerating inflation, many Chinese are struggling to make ends meet.

Consumer prices, including food and services, moved up at a 27.1 percent annual rate in August in China's 35 main cities, the State Statistical Bureau reported last week. That rate, the highest in five years, topped the 24.2 percent rate in July.

Spooked by the inflationary spiral and growing joblessness, the government has unveiled, in recent days, a series of measures to combat China's mounting economic troubles:

* A ceiling on prices of grain, cotton, and chemical fertilizers, which the State Statistical Bureau blames for being "the main catalysts of current spiraling inflation."

* A renewed campaign to end unsanctioned price increases in grain, edible oils, meat, eggs, and vegetables.

* A two-year program of job training, unemployment insurance, and labor services, amid predictions that the current official jobless rate of 2.6 percent could almost double by 1999.

* An increase in interest rates on long-term savings deposits and Treasury bonds to block possible fund withdrawals and panic buying of goods that would further fuel inflation.

* A redoubled effort to collect unpaid taxes to bolster sagging tax revenues.

Due to the price surge, government officials no longer talk about keeping inflation within the original 1994 target of 10 percent. Indeed, they have raised the inflation projection to 15 percent, according to the China Daily, the official English-language newspaper. …

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