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China sees inflation rise to 11-year high

by 5m Editor
11 December 2007, at 9:06am

CHINA - China's key inflation indicator surged to 6.9 percent in November. It's the highest rate seen in more than 11 years and the result of increasing food price.

The escalating price of basic foods - primarily pig meat, grain and edible - is triggering fears about inflation and such trends are becoming more evident.

"The latest figure indicates accelerating inflation pressure," said top Government economist Yao Jingyuan. He said price jumps for foodstuffs, which have a 33 per cent weighting in China's CPI, and oil price increases were the major driving forces behind the rise.

National Development and Reform Commission Vice Minister Bi Jingquan said the combination of domestic food price increases, continuous price rises in corn, soybean and wheat in the international market, and domestic booming demand for resources had driven up the overall price level.

Food prices ballooned 18.2 per cent in November from a year earlier, compared with 17.6 per cent in October.

The bureau said food prices drove up the November CPI figure by 5.94 percentage points.

Grain prices rose 6.6 percent over the same period last year, while cooking oil prices increased 35 percent. Pork prices, blamed for the recent increase in CPI figures, soared 56 percent.

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5m Editor