Chinese Inflation falls again...

In Article 18 in the book I looked at the reasons behind the sharp rise in inflation that China experienced last Spring (2008). A year on and it is such a very different picture. The latest data for their consumer price inflation showed a fall for the fourth successive month. Once again the key factor was the sharp declines in non-food items although the price of China's most key meat, pork, also fell by a third compared to a year ago. The main reason for the decline in China's inflation rate is mainly the impact of the World recession which has led to much less demand for their exports to overseas markets. So China's producers and retailers must cut their prices to compete overseas and also to sell more at home.