By MALILA Harris
CHINA NEWS - China in the recent past, has witnessed an exponential economic growth. However, the double-digit food price inflation has rung a tone in the government's ears. In a recent statement, China's premier Wen Jiabao assured Chinese people that the government was trying its best to find new measures to tackle with the rising food prices.
In the government website, he said that the government council had planning to formulate new measurements to tackle with the problem. However, he unrevealed any detail about the plan of action. Analysts are contemplating that effective measures would be in the form of price caps, subsidies and penalties for food hoarding.
Meanwhile in another trouble brewed when the Shanghai stock exchange stoop nearly 10% low in four days because of sudden scare of interest rate rises.
Recently, one of the biggest banks of China The People's Bank of China increased interest rates due to inflation, and adopted hostile nature since.
It is reported that in October consumer price inflation rose to 4.4% and this was the highest increase in last two years.
Food prices are particularly in severe condition that directly affect on common men. Last month food prices rose 10.1%.
Beijing recently criticized the US Federal Reserve's resumption of quantitative easing (QE). The Fed's new round of QE threatens to weaken the dollar, making Chinese imports less competitive in the US. But to ease the situation, the People's Bank of China is expected to buy more dollars and sell more yuan.
However, there is a danger behind it as selling more yuan would fuel more inflation.
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