Continued high inflation is a worry for China’s monetary policy-makers. But higher prices have helped many food producers: real incomes are now growing faster in rural areas than in the cities. Families also seem to have reacted to higher food bills by running down their savings rather than cutting back elsewhere. In other words, the current bout of inflation is not harming consumption and may even be helping to reduce inequality, which should give a helpful nudge to the long-awaited rebalancing of the economy.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services