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China has not seen inflation in double digit since 1992 when it hit uncontrollable 25%. But now, it is beginning to show signs of stress that needs to be released. See graph from The Economist.
Food, as always, has been the main inflation driving factor. In 2008 it pushed inflation to 8%. Income, in the hands of an average Chinese – there don’t seem to be any middle class – has increased. But so has his staple food: mutton, chicken, eggs and milk.
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