China is trying to control inflation. It matters to most of the globe.

Shanghai – prices are soaring In United States and Worldwide, prompting growing warnings that a wave of inflation could occur threat to the global economy If it persists.

China can’t wait to find out.

Beijing is moving quickly to protect its factories and workplaces from rising costs. This has discouraged steel makers and coal producers from raising prices. It has promised to check price fixing and hoarding. And it has allowed its currency to rise to levels unseen over the years, rendering it a more valuable and powerful tool for buying the world’s grains, meat, petroleum, minerals and other essentials.

Rising prices in China, the world’s largest producer and exporter, can be felt around the world. China’s statistical agency announced Wednesday morning that prices charged by factories, farmers and other producers were up 9 percent in May from a year earlier, when the pandemic was slashing their costs. This was the biggest increase since September 2008.

Manhattan-based importer and distributor Annabelle New York, which sells down-filled parkas and other high-end apparel to department stores and other retailers, has already increased prices by 10 percent this spring. But the company costs 20 percent more for goods from China, said Bennett Model, the company’s chief executive and president.

The increase in world oil prices has made the chemicals for making synthetic fabric shells of parks expensive. Down feather, for which China is the world’s leading producer, has become more expensive. And trans-Pacific freight costs have tripled for some shipments as air cargo companies and shipping lines struggle to keep up with demand.

Only the fear of losing customers has kept Mr. Models from going all these high costs to US stores. They have instead accepted narrow profit margins.

“If I really wanted to cover all the growth, the price would be prohibitive right now,” he said.

It is not certain that the current round of global inflation will last. Many economists believe that price increases medium will do Once companies overcome supply constraints due to factory closures and other measures taken during the coronavirus pandemic.

But China has clear reasons to fear inflation. It has experienced alarming economic growth in recent decades. time to time Gone with Rising prices sparked outrage across the country. rising prices contributed to the demonstrations 1989 in Tiananmen Square in Beijing. Officials have long used informal price controls and subsidies to curb rising costs at China’s supermarkets and family dinner tables.

For some items, prices are actually rising. paper maker This spring it has quadrupled prices in bulk quantities for products such as napkins and toilet paper. Soybean is becoming costlier for tofu.

But for now, Chinese manufacturers, rather than consumers, are feeling the rise in prices. Costly iron ore from Australia and corn from the United States have increased significantly.

cabinet of china Subsidy announced a week ago For small businesses to help them bear the rising cost of goods. To discourage speculation, new limits have been put in place on trading in items for future delivery. To keep more metal inside China, export taxes on some types of steel have been raised.

Prime Minister Li Keqiang at the cabinet meeting on May 19 ordered the officers “To strictly crack down on monopolies and hoarding and strengthen market supervision in accordance with laws and regulations.”

Government measures can slow but not stop wholesale price hikes. Caught by rising raw material costs, companies eventually find ways to raise prices or even suspend production. Caught between rising raw pulp costs and various pressures not to raise paper prices, paper producers this spring have closed some of their factories for maintenance.

So far, the rise in prices is not difficult for Chinese consumers. China’s consumer price index was up only 1.3 percent in May from a year earlier.

One reason is that China’s domestic economy has not yet fully recovered from the pandemic. Lower consumer spending means fewer families are bidding on the prices of items like pork chops, which have recently gotten a little cheaper, and even men’s underwear, for which prices haven’t changed. .

Vendors at a covered market in Shanghai said on a recent afternoon that they had yet to see any sign of a rise in food prices. For example, there was little change in the prices of eggs and beef.

“The cost of living hasn’t changed much, the price of green vegetables has always been,” said Yang Yuxia, who has sold eggs from chickens, pigeons and other birds at a stall there since 1998.

But traders of food items that are not staples were already on alert for price hikes by their suppliers.

“Of course, I’m worried about the price going up — if prices go up, I’ll have fewer customers,” said Gao Hong, a seller of freshwater eel and shrimp at a store across the street from the market.

China’s consumers are also protected by the country’s surplus of factories that make essentials such as clothing and home appliances. The greater capacity ensures that buyers have plenty of competitors to choose from. This makes it difficult for manufacturers to pass on the hike in prices to buyers.

“With a supply chain that has less negotiating power, it will incur higher costs,” said Wang Dan, chief economist at Hang Seng Bank China. In China, companies in the early stages of the supply chain have less bargaining power than retailers and consumers.

However, higher China prices may spread overseas. The country’s leaders are trying to partially offset the threat of inflation by allowing their currency to increase in value.

The renminbi is nearing its strongest point against the US dollar since mid-2018. One dollar now buys approximately 6.4 renminbi, up from 7.1 almost a year ago.

The renminbi has risen 2.2 percent against the dollar since the beginning of this year, making each one worth only a fraction of a penny. But China spends vast amounts of money on dollar-denominated resources — $176.2 billion last year for crude oil imports, for example, and an additional $50.8 billion for grain imports. Those money add up quickly.

China’s currency has long been a hot-button political issue. US lawmakers and officials have for years accused Beijing of keeping the currency weak to give the country’s exporters a competitive advantage in foreign markets.

But in this case, Chinese officials simply backtracked and let global forces strengthen the currency. As the United States has borrowed and spent heavily in recent months to counter the economic effects of the pandemic, the dollar has begun to slide against a number of currencies, including the renminbi, against the euro.

“The appreciation of the renminbi is driven by the good performance of the Chinese economy,” said Gary Liu, an independent economist in Shanghai. “The US is now producing too much money supply, and the dollar is softening as a result.”

However, a strong currency has its downsides, and Chinese officials are taking steps to prevent further growth. A strong currency makes Chinese goods less attractive in other markets. For now the world seems happy to buy Chinese-made goods anyway. Nevertheless, the People’s Bank of China on May 27 warned currency traders not to think that further appreciation was a one-sided bet.

Meanwhile, a stronger renminbi could push up the price of Chinese-made goods in the United States, adding to price pressure there, albeit in a mostly moderate manner.

A US Bureau of Labor Statistics Index Average price for imports from China Shows that from the summer of 2018 to the start of the pandemic, prices fell by about 2 percent and then closed. Now those prices have jumped 2 per cent since November.

“Is China Export Inflation?” Louis Kuijs, a China expert at Oxford Economics, said. “In terms of renminbi, it is not so clear. But in terms of US dollars, it starts getting bigger.”

lin kicking and liu yi Contributed to research.

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