Access Asia has written an interesting piece about China’s current inflation problems today.
You can find it here.
They make the point that food prices for urban Chinese have actually remained rather cheap "which is why eating out is so easy, and grocery shopping in not a major expense for most urban dwellers".
Of course, rural Chinese have suffered, and that’s why the government has started price controls on staples.
But in the cities "food prices should really be higher than they are today" because, while the incomes of the average urban workers have risen by 244% between 2000 and 2009 while the transaction value in the catering sector, which I guess is the cost of a restaurant meal, has only gone up by 110.9%.
"The real effect is that eating out has become cheaper and cheaper. In fact, half as expensive. Likewise, most food sector average unit prices have, in real terms, been getting steadily cheaper for most urban dwellers," Access Asia concludes.
Well, it is an interest point, but let’s not forget that (a) restaurants by and large do not declare their full income in China, so it’s difficult to assess the statistics accurately and (b) the impact of inflation is emotional, not logical.
The Chinese are certainly grumbling about food prices. As any behavioural economist will tell you, if people have adjusted their expectations to a certain price point, they will obviously be upset, whether logically or not, if prices then begin to rapidly rise.