China’s rising prices, driven by pork crisis, leaving a bad taste in the mouths of Chinese consumers, businesses


·         China’s consumer price index jumped to 3.8 per cent in October, the highest since January 2012, driven by the price of pork doubling from a year earlier

·         Businesses are on the verge of closing, while the make-up of the Chinese dinner table is changing, after African swine fever destroyed the pig population


He Huifeng, South China Morning Post (China) 

23 Nov, 2019


In what is becoming a daily scene in markets, restaurants and office buildings across China, ordinary citizens cannot help but share their worries about the sharp rise in the cost of living and discussing how to save money.


This trend is in response to a new environment of rising prices and slower economic growth, which is leading to growing discontent among the public.


Pork is China’s favourite meat, especially among middle and low-income groups, but rising meat prices are also dampening consumer sentiment and undermining Beijing’s attempts to convince the population of the country’s bright economic future.


Driven by the price of pork doubling from a year earlier as well as the cost of other meats increasing as people seek alternatives, China’s consumer price index jumped to 3.8 per cent in October, the highest since January 2012.


Internet posts complaining about skyrocketing meat prices and sharing practical ways to save are becoming increasingly popular.


A post on November 8 by a migrant worker in the Yangtze River Delta sharing her recipes for three affordable meals per day attracted more than 50,000 views and replies. Another post showing rising prices at fast food shops across the country had over 30,000 views and replies in a few days.


Smaller shops and restaurants are also struggling to survive amid the rising prices, which have followed since the outbreak of African swine fever

destroyed China’s pig population.


“I’m going to have to shut down the business,” said Li Jie, who runs three dim sum cafes in Guangzhou with his friends.


Li’s wholesale supplier has raised the price of pork five times between August and October, from 58 yuan (US$8.3) to 90 yuan (US$12.8) per kilogram intestines used in fried chitterlings, a favourite local dish.


“What we can do is either increase the price [of a meal] or reduce the amount of meat in each dish. If few customers order the dish due to the higher price, we have to take it off the menu,” added Li.


Rising prices and the slowing of the economy are having a negative impact on the overall economic picture in China.


“The main driving force of China’s consumer spending comes from the country’s middle class, but with the slowdown of China’s economy, their income growth and the value of real estate assets, actually, have been stagnant and even sliding,” said Simon Zhao, a professor at the United International College, a joint school created by Beijing Normal University and Hong Kong Baptist University in Zhuhai.


“As result, there is likely to be a trend that ordinary Chinese consumers continue to shrink their consumption demand in at least the coming couple of years. [If the economy continues to slow in the next year] it will absolutely weaken further the income and spending power of working class and middle class workers.


“[If consumer prices remain high] there will be significant pressure on ordinary Chinese people, while both Chinese families and local governments are deeply trapped in a high level of debt.”


But, despite their current difficulties, Chinese consumers in general are better off than they have ever been, according to Zhao...


... And like Li, some small fast food restaurant owners are also considering the reality of closing their businesses.


“Because pork was so expensive, I had to raise the price from 10 yuan (US$1.4) to 12, and then 15 within about a month,” said a shop owner in Guangdong who sells rougamo, a kind of pork burger. “But after the price increase, only a few customers come in [to the shop].”


The ongoing food inflation has also forced families to cut back or even give up dishes that have been staples for ordinary Chinese citizens.


“Chicken and pork are soaring in price. It’s changing my habit of making soup twice a week to once a week, and I may need to cut it to twice a month if food prices continue to rise,” said Zhang Jiehong, a Guangzhou resident...