[Viewpoint]The price of pork in China

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[Viewpoint]The price of pork in China

To the Chinese, the livestock with the most significance is the pig.
They put pigs above cattle, sheep, dogs and cats.
They consider the pig to be the most blessed of the 12 zodiac animals. People try to have babies in the year of the pig, like this year.
In the novel “A Chinese Odyssey,” one of the main characters, Pigsy, is also an embodiment of a familiar pig.
They also say, “If we don’t eat pork for a few days, we can’t taste food or feel life’s pleasures.”
This year, the Chinese began making severe complaints to government authorities because the price of pork has been skyrocketing.
In China, pork does not have much price elasticity.
Because pork is such a special ingredient, consumption doesn’t immediately fall even when its price climbs.
After more farmers gave up pig farming due to a sharp fall in the price of pork price last year, pork prices soared this year because of a lack of supply without any change in demand.
As a result, the price of 7.5 yuan (about $0.99) per kilogram last year rose to 15.7 yuan in a year. The problem is that other prices are increasing, too.
As the pork price ― a barometer for subjective consumer prices ― rose sharply, other food prices, including eggs and noodles, also soared.
The pork price fluctuation stirred up inflation sentiments.
Due to this, the consumer price index in July rose 6.5 percent compared to the same period last year.
Because of pork, the annual average price index is expected to exceed the government’s control target of 3 percent this year.
Chinese Prime Minister Wen Jiabao is busy trying to settle the situation. He visited pig farms in Shanxi Province in May and agricultural product markets in Beijing in August.
The People’s Bank of China, the central bank of China, increased interest rates four times this year alone.
But experts keep warning about the risk of inflation.
Although the Chinese government issued a comprehensive measure, the prices did not settle until recently.
As office workers rushed to campus cafeterias for inexpensive food, colleges have raised the price of food and students protested against the raise.
Even with the 17th National Convention of the Chinese Communist Party coming next month ― a big gathering held every five years ― the Chinese government has to worry about calming down the public sentiment because of price instability.
In the eyes of the concerned price authorities, pigs could be seen as “dissidents” who cause social instability.
The pork price incident this time indicates a qualitative change in Chinese society that has resulted from three decades of reform and the opening of its doors.
In other words, it shows that the Chinese market moves so actively that even the Chinese regime, which wields strong power, cannot control its movements.
Since seizing power, the Communist Party has treated its market as equal to capitalism. The party advocated only “planning,” as if plans meant socialism.
In 1970, Deng Xiaoping paid heed to the market again, saying that the “introduction of a market economy does not change socialism into capitalism.”
In January 1992 in a lecture during his visit to southern Chinese provinces to encourage reform, he said, “Socialism, too, has the market as capitalism has planning.”
In the 14th National Convention of the Chinese Communist Party in October of that year, he selected the “socialist market economy” as the biggest goal for reform and opening up.
The Chinese government realized this time that although the market economy can bring material prosperity, it can also have adverse effects.
Along with this, the pork incident can be a signal for the demice of a “high-growth, low-price myth” in China.
The increase in the price of pork, a core ingredient of Chinese dishes, led to businesses paying more and thus has become a factor in the hike in industrial product prices, including exports.
This is ominous news for consumers in the global village who have difficulty living without the cheap products made in China.
China’s entrance into a high-price age is causing concerns that price inflation will spread outside China, going beyond its domestic problem.
That’s why citizens in the global village are uneasily watching the pig price fluctuations that bewilders the government under the Chinese Communist Party.

*The writer is the Beijing correspondent of the JoongAng Ilbo.

by Zhang Se-jeong
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