Inflation in China Raises Due to Lockdowns

Inflation in China is continuously rising with the rising commodity prices and lockdowns in major cities causing the price rise for consumers and businesses.

However, China's overall inflation remains much milder than the United States and other major economies, giving governments and central banks ample room to use stimulus to support the slowdown.

Consumer prices were up 1.5% in March from a year earlier, while the prices charged by companies at the factory gate were up more than 8. According to the National Bureau of Statistics, prices for fresh vegetables were up an annual 17% in March, fruit prices were up 4.3% and the price of flour was up 4.6%.

China imposed lockdowns in areas including Shenzhen and the northeastern industrial province of Jilin. Shanghai, the most populous city and the financial and commercial powerhouse of the country has also been under lockdown due to covid-19. 

Iris Pang, chief economist for Greater China at ING in Hong Kong has said that the rate would still be extremely mild compared with the inflation in the USA, where consumer prices are notching gains not seen in 40 years. 

That is, while the Federal Reserve has signalled a series of rate hikes in the United States, the People's Bank of China has continued to ease policies to support stagnant growth in China with the spread of Covid-19 and export growth and real estate sector slow.