Politically speaking, there is no economic phenomenon as sensitive as a price hike for a single product like pork, as it harms ordinary people, particularly the poor.
Economically speaking, however, China’s latest uptick in CPI is what economists call “structural inflation”, meaning it is driven only by pork prices rather than overall inflation. The CPI rise hides a much bigger problem: relatively low core consumer inflation and factory-gate deflation.
If pork-driven inflation is excluded, China’s core consumer inflation remains sluggish, at an annualised rise of just 1.4 per cent or 0.1 per cent month on month. The pork price increase alone added 2.4 per cent point to headline CPI.