The Consumer Price Index (CPI) of China is continuously rising and is not showing any signs of slowing down. In November, the Consumer price index elevated at a rate of 4.5%. This has been the fastest growth that has been registered since January 2012. The analyst has expected to register a growth of 4.2% but the recent hike topped the estimation. The main reason that has been attributed to the steady rise in the increase in the price of pork. Pork is one of the prime meat markets in China.
Pork price has increased in China due to the African Swine Fever that has completely decimated the swine population of China. The wholesale price of the pigs has been around $7.81 per kg. The producer price index (PPI) that indicates the profitability of the corporate world has also declined. The profitability has come down by 1.4%. As the demand for manufactured goods remains weak, the price of manufactured goods has kept declining. The major manufacturing sectors that were affected involved the oil and gas extraction and the chemical manufacturing industries. There is further pressure on the Chinese market due to the ongoing trade war with the USA. The policymakers are vying for a growth target of 6% -6.5%. In order to achieve this, China has developed several policies such as reducing the interest rate of the markets, unrolling government bonds, which are estimated to be around $142.1 billion. Festive occasions such as Chinese Lunar Year is approaching. It will be challenging to regulate the price of pork as the demand for meat may surge. This has also affected the other meat sectors where the demand for other meat has also increased.
The Chinese officials have tried to stabilize the surge through increasing the production of pigs, and it has started its effect slowly on the population. China has not undertaken any specific measures to change its monetary policy under the given circumstances. The policymakers have predicted that the situation is still under control and has they have restored to undertake a “normal” monetary policy.