China's Goal: Stop Inflation

The FT reports:

The raft of price control edicts issued over the past week by Beijing in an effort to rein in inflation has carried a whiff of old-style central planning and prompted scepticism over their likely effectiveness.

“If [the controls] work they can only work in the short term, not in the long term,” says Ha Jiming, chief economist at China International Capital.

But such criticism may miss the point, according to Chinese officials who say the measures are primarily a signal of the government’s determination to stop inflation – which surged to an 11-year high of 6.9 per cent in November – getting out of hand.

“It is not that the leadership doesn't understand the importance of markets. It is that they understand the importance of politics,” says a local economist who asked not to be named.

To read more:

http://www.ft.com/cms/s/0/536c0644-c552-11dc-811a-0000779fd2ac,dwp_uuid=9c33700c-4c86-11da-89df-0000779e2340.html?nclick_check=1