Chinese New Year bills shoot up
Chua Chin Hon, Straits Times 3 Feb 08;
Severe winter storms in China pushing up prices already at 11-year high
BEIJING - THIS Chinese New Year is turning out to be the most expensive ever, families complain, as fierce winter storms whipped up prices already at an 11-year high.
Many families say in interviews that they are expecting to spend 50 per cent to 100 per cent more on festive shopping, gifts and related expenditures this year compared to last year, due to price hikes for food and other essentials like cooking oil.
The recent spell of heavy snow and rain that crippled transportation networks, as well as destroyed crops and livestock, pushed expenses higher.
Those who travelled back to their hometowns despite the inclement weather have had to fork out more money for their transportation, as compared to last year.
Mr Lu Ming, a computer technician who travelled from southern China's Shenzhen city to his parents' home in northern Hebei last week, said that he had to spend over 1,500 yuan (S$295), taking buses, cars and taxis to get to his destination.
In the past, when the railway network functioned normally, he could get home for under 700 yuan.
Official figures released two weeks ago showed that overall food prices went up by 12.3 per cent last year. Grain prices increased by 6.3 per cent, while the cost of meat and eggs shot up by a whopping 31.7 per cent and 21.8 per cent respectively.
The spiralling food prices, largely caused by supply shortages, powered overall inflation to 4.8 per cent for the whole of last year. The previous record was in 1996, when annual inflation reached 8.3 per cent.
Low- and middle-income families have been the worst hit by the rising prices.
Madam Yi Xiufen, whose family of six survives on about 3,000 yuan a month, said she is feeling the pinch this year. Her family expects to spend 2,000 yuan to celebrate the Chinese New Year, compared to just over 1,100 yuan last year.
'We can't afford rich food this year, and will have to make do with more vegetables and less meat,' said the 78-year-old grandmother, who used to work at a factory producing zippers.
'To cut down on daily expenses, I buy vegetables only when the stalls at the market are about to close. You can get a pile of greens for one yuan or two.'
Upper-middle income families, while unfazed by the price increases, say they have noticed the spike.
'It seems to be getting more expensive to have meals at restaurants, but we definitely have no problems shouldering the additional costs at the moment,' said economics lecturer Wang Xian, 31.
She and her husband Dong Yu, a senior sales executive, earn a combined salary of about 29,000 yuan a month.
The record inflation has also not stopped another couple with a comparable level of family income, the Shengs, from budgeting about 40,000 yuan for generous hongbaos and a trip to north-eastern Heilongjiang province to visit their parents.
The comments by families interviewed by The Sunday Times underscore the view of many analysts that while there is widespread unhappiness with the spike in prices, the threat of social unrest remains a remote one.
For one thing, healthy pay rises and increased government subsidies have helped many families weather the inflationary pressure.
Madam Yi, for instance, said that the monthly retirement benefits for her and her husband have been raised by more than 200 yuan each since the beginning of the year. The Dongs and the Shengs have also reported salary increases of between 10 per cent and 17 per cent this year.
The concern is, however, that the economic fallout from the snow storms would cause prices to rise even faster this year, and push inflation to around 5 per cent for the full year.
'We can't do anything about the situation other than to pray that no one in the family falls sick,' said Madam Yi, adding that a bout of flu could set them back by some 300 yuan in medical bills. 'That would be a disaster.'
