In China, Inflation Fuels Expectations: World View

Adam Minter is a Bloomberg View columnist. He is the author of “Junkyard Planet: Travels in the Billion-Dollar Trash Trade.”
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The price of carrots is rising again. Riding the elevator this morning, one of my Shanghai neighbors -- an elderly man with whom I’ve exchanged English words in the past -- told me, unprompted, “Carrots are too expensive.”

 To emphasize the point, he waved a clear plastic bag of them at me. There wasn’t much I could say, and there wasn’t much else he could do but get out of the elevator and go cook his carrots. Political advocacy, even on a subject like the high price of food, won't get a retiree far.

Nonetheless, the rising price of food has become a problem in Shanghai, especially as drought conditions -- the worst in 138 years -- intensify across central China’s agricultural provinces. This week, Chinese state media reported that in one Shanghai district, the price of rice -- which far eclipses carrots in political potency -- increased by as much as 20 percent in one month. To understand just how sensitive the issue of inflation has become consider a headline in People’s Daily, the Party’s self-proclaimed mouthpiece. In defiance of what every Chinese pensioner sees in the local wet market every morning, the headline declares: “Drought has limited impact on China’s grain prices.”

Some Chinese bloggers have another explanation for inflation: government policy. Xie Yuhao, on the Sina Weibo microblog, tweets: “The reasons for price inflation are as follows: 1. Rising oil prices; 2. Real estate restrictions resulting in underutilized capital flowing into other industries." Xie Yuhao added, "Excessive foreign exchange reserves have resulted in an over-issued currency.”

The view that China’s accumulation of dollar reserves has harmed Chinese consumers is gaining, well, currency, in certain quarters. Stephen Xia, another user of the Sina microblog, tweets: “Of course there are international factors affecting the price inflation, but I think a series of wrong economic decisions made by the government is the main reason.”

Such discussions appear on only a small portion of China’s microblogs, but they are indicative of a skeptical mindset that asserts itself with growing frequency. For example, after the National Development and Reform Commission responded to looming summer power shortages with an electricity price hike on businesses and farmers, many microbloggers were quick to challenge the rate hike.

“The decision to raise the electricity price … is another victory of state owned electricity generating groups and power companies over ordinary people,” wrote economist Wang Fuzhong on the Sina microblog. Lawyer Li Zhiyin, also tweeting on Sina, added: “Although the hike is focused on non-residential electricity, in the final analysis, the cost of industrial electricity is carried by every ‘resident.’ The cost will be transmitted to their wallets via prices for farm chemicals, fertilizer, storage, manufacturing, and transportation.”

It's unclear what Chinese citizens can do about inflation beyond microblogging or complaining to foreigners in elevators. But some microbloggers have formulated a response: launching an independent -- outside the Communist Party, that is -- candidacy for election to a seat in a local Party Congress. Competitive elections for local offices are not new. “Village elections” date back to the 1980s, and they’ve garnered a fair amount of foreign media coverage, much of it skeptical.

What’s different about the current spate of independent candidacies is first, they’re actually independent; second, there are lots of them; and third, they’re being launched from microblogging services that have become China’s de facto town halls. In effect, what had been merely a cyber-discussion is, bit by bit, evolving into unmistakable, if limited, political action.

The state media has covered this perfectly legal, though rarely exercised, right in the run-up to local Congress elections, which suggests the Communist Party doesn't feel threatened by the phenomenon. That’s not to suggest that the Party is necessarily comfortable with it. In an editorial headlined, “New Faces Should Get Back to Reality,” the nationalist Global Times wrote that:

"Independent candidates could destroy the current system by soliciting votes on the Internet, posing a challenge at the critical point of China's political scene. Any breakthrough of that point will deviate from China's reform doctrines, which stress step-by-step progress. Instead of pushing forward political development, the deviation is more likely to create political risks in society.”

A cooler response to the phenomenon came from Youth Daily, in a story reprinted in the English edition of the Global Times, which noted that:

“Most of the candidates have made careful consideration and preparations before deciding to attend the election. Their candidacies and the public focus on their campaigns are a reflection of social progress and will help to the healthy development of socialist democracy.”

It’s important not to overstate the impact of these candidacies; they are aimed at relatively minor offices with zero national influence. Likewise, there are no means -- no legal ones, anyway -- by which an independent candidate can aspire to higher office, such as the Chinese presidency, which is slated to change hands next year. Nonetheless, there’s little question that the rollicking dialogue that characterizes China’s blogs and microblogs is powering independent candidacies. That’s worth noting, even if the candidacies, like the blog accounts, can be shut down by the state tomorrow.

Of the independent Weibo candidates, none is better known, or more eloquent, than Li Chengpeng, one of China's most popular bloggers and a candidate for the Wuhou District People’s Congress in the western metropolis of Chengdu. Early Thursday, he posted to his blog a sarcastic, yet eloquent, rationale for his candidacy. During its first 12 hours the post received nearly 150,000 visitors. Its rhetoric was especially noteworthy coming from a candidate for even a minor political office:

“I often hear someone around me saying they are Chinese, but what do you rely on to define oneself as Chinese? An identity card is no proof you are Chinese, it only proves that a certain vegetable knife belongs to you, a convenient clue for the police to investigate a murder case. A certificate of property ownership also does not prove you are Chinese, it merely proves you are the one who spent the world’s most expensive money renting a room [suitable] for bean dregs. A birth certificate, in reality at birth you are forsaken by the world’s largest human affairs organization, and in consequence you get comparatively expensive educational fees, medical fees, fuel fees, right until death . . .  Only by voting do you prove you are a genuine Chinese -- the first time you fill in the form “Citizen of the People’s Republic of China.”

Li concluded by identifying himself not as a politician or candidate, but as a shareholder in China. He bid good morning to his fellow “1.3 billion shareholders.”

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

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Adam Minter at

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