China might have the muscle but where are the brains?

I wrote about inflation in china before and how it might affect their economic growth, in fact it may prove to be their economic Achilles heel.

now the BBC have reported that the Chinese Government has come up with a novel way of curbing inflation (get a reporter from the Economist & FT over there quick!). They will fine retailers if they raise their prices… What ingenuity! Why didn’t somebody think of this before? I wonder if they will also fine them for not having any stock after they become unable to purchase anything because they will not be able to make any mark up on it?

Here’s the scenario:Mr. Chang buys pork for €5 and would normally sell for 6 or 7, but now pork costs 6 or 7, he can’t mark this up, so Mr. Chang stops selling pork, that doesn’t mean demand disappears, it means demand will actually rise due to scarcity and will result in demand pull inflation. The Chinese Government probably didn’t think of that aspect though, for all the great performance of China’s market it just goes to show that there are still monkey’s at the helm.

And of course there is the curse of the Olympics. ‘Curse?’ I hear you say? Yes, every country that hosts they Olympics has always had an economic up-swing prior to it and that has always been followed by an economic downswing, China might be the first to buck this trend, but if they do you can bet a kidney they won’t be chewing on pork-skewers while they do it.

Novembers inflation figure on food was 18%, November, not the year, just the month… And the price of pork went up by 50%. For the majority of Chinese who are about two steps above dirt poor it will be a further nail in the coffin. Food prices were the main concern in a survey done last year by Quentin Sommerville, kind of the way property prices were here for a long time.

The other brilliant stroke of the Chinese Government is that they are restricting rice exports, well done… that will magically make lots of pork appear. It really goes to show that the brains in China are with the entrepreneurs and the business community, they must send their cast offs into public office as a means to getting rid of them I suspect.

Then of course they beat a man to death, yes death, for filming an argument between government officials on his mobile phone in Hubei, don’t worry about the international repercussion on that one, perhaps they think he should be grateful that he wasn’t run over by a tank instead, its a total throwback to Tiananman square.

Hubei is highlighted on this mapThe man they murdered Wei Wenhua is the manager of a construction firm in Tianmen (not Tianenman) city and all he was guilty of is filming on a mobile phone. Actually it was the refusal to delete the film that got him killed. So that tells us that whatever the offials were doing was bang out of order and thats before they even sullied their bibs with murder.

The ‘officials’ are called Chengguan and they are a quasi-militia, a cross between an police officer and a strong-arm. People are now calling for an abolition of them entirely as this is not the first killing they have committed.

Maybe its time that we show China what a deplorable record in human rights will earn you, urge a sportsperson to skip Beijing 2008, better yet, buy all the rashers you can and keep the price of pork high, then the folks there will launch their own revolution.

Leave a Comment

Awesome! You've decided to leave a comment. Please keep in mind that comments are moderated.