Sino File | Xi Jinping’s biggest headache isn’t Hong Kong. It’s the price of pork in China
- Rocketing food prices make a mockery of Xi’s ‘Chinese dream’ and threaten widespread discontent
- The Communist Party’s policies contributed to the crisis by shifting imports from the US and Canada to Russia
Perhaps it’s no coincidence that we’re in the Year of the Pig. Rarely has a single food source played as big a role in the nation’s politics as now.
Fears over a year-long outbreak of deadly African swine fever have steadily grown to the point that the topic now dominates the nation’s domestic and foreign agenda with talk of “pork politics”, “pork economics” and “pork diplomacy”.
There’s good reason for the fuss. Pork is the principal source of dietary protein for the Chinese, who consume half the world’s supplies. Since the virus was discovered at a farm not far from China’s border with Russia in August last year, it has spread to all 31 mainland provinces and up to 200 million pigs – nearly half the number in the country – have either died from the disease or been culled.
The epidemic has caused prices to rocket, leaving a number of casualties in its wake. First up is the economy; the country’s pork industry contributions to the national economy are estimated to be US$128 billion.
But an even bigger worry for those in Beijing’s corridors of power is the effect the rising prices are having on living costs – especially at a time when the US-China trade war and the depreciation of the yuan are already pushing up inflation.
Pork, as the biggest single consumer goods item in the consumer price index (CPI) basket, is a key player in inflation. It accounts for 10 percentage points of food prices and more than three percentage points overall in China’s CPI. That is why the 46.7 per cent year-on-year jump in pork prices in August pushed the CPI to a 20-month high of 2.8 per cent last month. The price of pork was responsible for more than 100 basis points, and more than one third of the headline inflation figure last month, according to data released by China’s National Bureau of Statistics on Tuesday.
What’s more, when pork prices rise, they drag other foods with them. The prices of chicken, beef and lamb are also now soaring, as consumers seek more affordable meats as substitutes.