Document Chinese inflation A PORCINE PHENOMENON SHANGHAI Soaring pork prices hog headlines and sow discontent in China Economists rarely think about the average gestation period of pigs (115 days) or[.]
Trang 1
Chinese inflation
A PORCINE PHENOMENON
SHANGHAI
Soaring pork prices hog headlines and sow discontent in China
Economists rarely think about the average gestation period of pigs (115
days) or the length of time a sow needs to reach sexual maturity (roughly
six months) But in China, a basic knowledge of hog-breeding cycles is
part of the job Pigs are so central to the Chinese diet that the ups and
downs of pork prices have an outsized impact on inflation Once again,
porcine expertise is in demand: African swine fever has devastated
China’s pigs, complicating its economic outlook
New data show that pork prices leapt by 23% in August from July
(2019), the highest monthly jump on record On an annual basis they were
up by 47% The feed-through to broader inflation has been modest so far
But pork is certain to become more costly in the coming months, pushing
consumer prices up further (see chart)
In the past, when pork prices soared, farmers quickly
produced more pigs That is harder now because the
population of breeding sows has collapsed The central bank
has started to ease monetary policy as growth weakens, but
the spectre of pork-led inflation, even temporary, could limit
its space for cutting interest rates
China consumes 55m tonnes of pork annually, as much as the
rest of the world combined Hu Chunhua, a vice-premier, said
in August that the supply shortfall this year will be about 10m tonnes,
more than is traded on international markets The government has
announced subsidies and low-interest loans to encourage pig farmers to
expand But since at least a third of China’s hog herd has been wiped out,
these measures will not generate instant results
Several cities have started offering limited amounts of discount pork
Others are giving cash to low-income residents China has also started to
release meat from its frozen-pork reserves—created in the 1970s for just
such emergencies But they cover barely a tenth of the shortfall On
September 10th Life Times, a Communist Party managed newspaper, had
an unusual banner headline: “Pork, it’s better for you to eat less” It
dressed up its article as healthy-eating advice, but readers surmised that it
was trying to put lipstick on a very pricey pig
Yet the government’s big concern for now is affordability, not inflation
Pork, together with rice, has long been close to a daily necessity in China
The word “meat” by itself almost always refers to pork But during the past decade pork has diminished in importance, as a share of both dinners and overall spending Beef and fish have grown in popularity Middle-class urbanites, not to mention the wealthy, are spending their money on much else besides Analysts now reckon that pork is little more than 2% of China’s consumerprice index, down from 3% a few years ago
Moreover, it takes more than pork for inflation to be a problem In 2008 and 2011, inflationary spikes followed big increases in the money
supply; price rises, though pronounced for pork, were a much broader phenomenon Over the past couple of years the money supply has grown much more slowly as regulators have pushed banks to reduce their leverage Prices of industrial goods have fallen into deflationary territory
The central bank will thus be inclined to write off African swine fever as
a supply shock The risk is that sky-high pork prices spread to other food items, placing unwanted upward pressure on wages
In the meantime people are adjusting Liu Zhiqiang, a retired
factory worker in Beijing, used to treat his family to pork ribs once a week “Now I just toss some pork shavings into fried
dishes and have more eggs instead,” he says Xishaoye, a
restaurant chain popular for pork-filled crispy buns, said that it was researching whether it could use chicken as an alternative
All going well, China will eventually emerge from this mess with bigger, better managed pig farms The hog cycle would become less volatile, and pork cease to matter as an inflation indicator China’s pigs would once more be by chefs rather than appraised by economists. (The Economist USA, September 14, 2019)
Notes:
- prices hog headlines and sow discontent:
sow (dsnh từ)= heo,lợn nái; (động từ)= gieo rắc
- porcine expertise: giới chuyên gia về lợn
- put lipstick on a very pricey pig: vẽ rắn thêm chân
- inflationary spikes: đỉnh điểm lạm phát
- to write off = xóa nợ