Inflation major reason Chinese citizens losing faith in government

Image by Getty Images via @daylifeInflation in China is on track to rise. According to the National Bureau of Statistics (NBS), the consumer price index (CPI) rose 3.2% in the first 11 months of this year. In November alone, the CPI rose 5.1% year-on-year and 2% month-on-month. And the CPI increase was mainly propelled by price hikes for foodstuffs. In November, food prices rose 11.7% year-on-year. The Blue Paper says food price hikes seriously affect living standards, especially for low-income families.

A December 15 survey by the research arm of the People's Bank of China (PBoC), the country's central bank, also reached a similar conclusion.

A questionnaire given to 20,000 bank depositors in 50 cities found their satisfaction with consumer goods-prices in the last quarter of this year had dropped to the lowest level since the last quarter of 1999. About 74% of the respondents thought prices were "unbearably high". This is 16 percentage points higher than in the third quarter. Only 25% of the respondents said the current price level was "acceptable", and most respondents expected inflation to intensify.

While the Blue Paper and the PBoC survey fail to mention it explicitly, it is apparent that dissatisfaction with inflation is a major reason for people's waning confidence in their government. At the annual session of the National People's Congress (NPC) in early March, Premier Wen Jiabao set this year's target of keeping inflation under 3%. It seems certain this will be "mission impossible", as CPI was expected to go up even more for December. More...