THE LONG TERM RISKS OF CHINA'S INFLATION PROBLEM
Pieter Bottelier
China Brief (Jamestown), Vol. 8, No. 9, April 28, 2008
China’s tolerance of inflation has a low threshold because of the risks it poses to social and political stability. That is why the government and the people have been worried about a steep rise in the consumer price index (CPI) since the first half of 2007. Is this the beginning of a new and potentially dangerous inflation cycle? Earlier cycles were often associated with severe social hardship and political turmoil. The Tiananmen disaster on June 4, 1989, might have been prevented if the high inflation of those days had not brought so many additional demonstrators to the Square frightening the leadership. Older political leaders remember that the Communists’ defeat of the Nationalists in the Chinese civil war of 1945-1949 was greatly assisted by the run-away inflation of those years, which sharply reduced the popularity of Chiang Kai-shek’s Republic of China (ROC) government.
(...) [artículo aquí]
Pieter Bottelier
China Brief (Jamestown), Vol. 8, No. 9, April 28, 2008
China’s tolerance of inflation has a low threshold because of the risks it poses to social and political stability. That is why the government and the people have been worried about a steep rise in the consumer price index (CPI) since the first half of 2007. Is this the beginning of a new and potentially dangerous inflation cycle? Earlier cycles were often associated with severe social hardship and political turmoil. The Tiananmen disaster on June 4, 1989, might have been prevented if the high inflation of those days had not brought so many additional demonstrators to the Square frightening the leadership. Older political leaders remember that the Communists’ defeat of the Nationalists in the Chinese civil war of 1945-1949 was greatly assisted by the run-away inflation of those years, which sharply reduced the popularity of Chiang Kai-shek’s Republic of China (ROC) government.
(...) [artículo aquí]
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