Low-income urban residents are currently suffering from the soaring price of food. A survey shows that city-dwellers have been influenced by the prices of commodities, and experts believe the government should bear more public responsibility.

 

Many of those interviewed in Shanghai say that they are living a frugal life and economizing on food, and worried about additional inflation. Moreover, "the speed of increasing wages has lagged far behind the speed of rising prices," a citizen said.

 

Quan Heng, a researcher at the Institute of Economics of the Shanghai Academy of Social Sciences, points out that the public is particularly sensitive to the price fluctuation because these are items they use every day, not dispensable things.

 

"A price-hike is not simply equal to inflation," Quan Heng said. "Inflation's strict definition in economics is the successively sharp increase of overall prices. Various reasons will lead to inflation, usually demand-driven, cost-propelled or these two factors collectively causing the inflation."

 

From his point of view, increased demand is not the reason for this price-hike, because the need for daily items such as meat, eggs, and poultry remains fairly constant. Instead, he believes the increasing price of agricultural products, the rising price of animal feed in particular, is raising the price of food.

 

Liu Huangsong, another researcher at the institute, has a different theory on the high prices. Liu believes the oversupply of pigs last year, which led to a price drop, followed by a substantial reduction in the amount of live pigs this year left the supply unable to meet the demand; furthermore, the rising price of petroleum has increased the demand for biological alternative energy.

 

"In fact, the increasing price of pork, which is the leading agricultural product, is not only to raise the income of farmers, but meet the economic laws of developmental requirements as well. China's agricultural prices were low for a long time, and wages of the urban population increased quickly while the income of farmers increased relatively slowly. Therefore, the adjustment of agricultural prices is reasonable," Liu said.

 

In view of the atypically rapid rise in prices, the National Development and Reform Commission recently issued an urgent notice to strictly control the government policy concerning increases and price intervention measures. Under normal circumstances, the market should regulate prices without the government stepping in. 

 

Gu Jun, professor of Sociology at Shanghai University, holds that requesting for the government not to interfere with the market unduly does not mean that the government should have no conduct and actions.

 

A rapid and sharp increase in prices will not only affect low-income groups' daily lives, but also bring middle-income people a sense of anxiety. "At this time, the government should take public responsibility promptly," Gu Jun said.

 

(China.org.cn by Fan Cong, August 8, 2007)