Does China data reflect true price pressures on its middle class?
At a time when the Chinese economy is under pressure on multiple fronts, such as swine flu and the trade war, experts are asking: Why does China’s inflation look so stable?
The most recent measurement of the public’s sentiment about prices, in the first quarter of last year, clearly showed concern about rising inflation among China’s middle class.
Since then, the Chinese economy has experienced additional price pressures, resulting from the effects of swine flu and the trade war with the US. So why, the experts are asking, does China’s inflation look so stable?
The People’s Bank of China (PBOC) has been conducting a quarterly survey of people’s finances and their views on the economy since 1999, questioning 20,000 randomly selected people from 50 Chinese cities.
Until last year, on price satisfaction, the central bank asked, “Do you think the current price is too high to bear, high but bearable or satisfying?”
Without explanation, the central bank quietly dropped the price satisfaction index from its 2017 second-quarter report.
While it is unclear why the PBOC removed the question from the survey, it’s fair to say fewer Chinese have been pleased with the price of goods in recent years.
The index plunged to its lowest in 2010 and hadn’t increased much before its removal. In its last appearance, fewer than a third of respondents were satisfied with prices, while two-thirds expected them to continue to rise.