Soaring Inflation Rocks China

Food prices feeding public unrest
By Peter Fearon,  Newser Staff
Posted Sep 11, 2007 3:36 AM CDT
A Chinese man checks out the groceries prices list on display outside a market store in Beijing, China, Thursday, Aug. 30, 2007. China's inflation rate this year is likely to exceed the government's 3...   (Associated Press)
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(Newser) – China's soaring inflation rate is the highest in a decade, putting pressure on the central bank to hike interest rates for the fifth time in six months to cool China's superheated economy. Food prices have jumped 18%, raising fears of public unrest., Bloomberg reports. Consumer prices rose across the board 5.6% in July from a year ago, and 6.5% in August..

Rents are also rocketing. The trade gap widened 33 percent to $24.97 billion in August, the second-highest monthly total ever.  The stock and property bubbles could get bigger and "eventually crash," warned a top economist. "The government should do something significant like raising interest rates to signal they're serious.''