MercoPress. South Atlantic News Agency

Pushed by pork prices inflation in China keeps rising

Chinese inflation for the second consecutive month peaked a ten year high pushed by a sharp rise in meat prices. The consumer price index reached 6.5% in the year to August, up from 5.6% in July, said the National Bureau of Statistics.

Meat prices have risen 49% over the past year, caused by a shortage of pork after a series of disease outbreaks. China, the world's biggest consumer of pork, has seen its pig population decline by 10% over the past year as a result of major outbreaks of blue-ear disease. The Chinese government has moved quickly to stamp out the problem, but pork imports have surged as domestic supplies try to recover. Non-food prices rose just 0.9% in the year to August. China's central bank has raised interest rates four times already this year to try to control inflation. Beijing is said to be acutely aware that while the country's growing urbanized middle class can cope with the higher food prices, it is a major problem for the country's rural poor, who make up most of the population. China also released on Tuesday August trade surplus figures which stood at 24.97 billion US dollars, down from the June record of 26.9 billion. China's trade surplus with United States was 15 billion and for the first eight months of the year hovered over 200 billion US dollars according to official figures. This was despite a number of safety scares over the month, including recalls of thousands of toys which contained too much lead in the paint. But at the end of the day surging demand from Europe and the US boosted Beijing's coffers despite cuts in tax rebates aimed at curbing China's export boom. The surplus is likely to add to US anger that China is keeping its currency low to benefit its exporters. China has been accused of keeping the Yuan up to 40% below its market value to help its exporters get an unfair price advantages over its trading partners. It is claimed this also distorts global capital flows. The Chinese government has let the Yuan rise gradually against the dollar since July 2005 when it was given a little more flexibility, but its biggest trading partners, the US and Europe, have been calling for faster appreciation. In an effort to cooperate, China has been taking steps to slow the booming export market, including imposing export tariffs and cutting import duties.