A happy holiday feast for Chinese amid global inflation woes — how? -Xinhua

* While high inflation has affected many countries and regions since the beginning of 2022, food and energy prices in China have generally remained stable throughout the year and before the Spring Festival, making a warm and hearty Lunar New Year meal possible.

* One of the main pillars of price stability in China is the country’s solid grain supply in 2022, when its grain production hit a new high, marking the eighth year in a row that the grain yield reached 650 billion kilograms.

* As a major energy consumer and importer, China has been able to handle the pressure to maintain energy market stability by boosting supply and coordinating demands.

* The state also has several effective supply and price management mechanisms, such as holding mayors responsible for a complete and affordable “vegetable basket”.

Written by Xinhua writers Zhang Zhongkai and Li Zexin

BEIJING, Jan. 21 (Xinhua) — The festive atmosphere was high across China during the Spring Festival, the biggest holiday for Chinese, with more family reunions expected after the new COVID-19 response policy.

This year’s Spring Festival, or Chinese Lunar New Year, falls on January 22nd. Among all the festival traditions, the feast on the eve of the Spring Festival, which includes a family gathering and sumptuous dishes, is one of the highlights.

Luan Qing, a 71-year-old woman in eastern China’s Shandong Province, longs to see her children and their families. I started preparing for the big meal two weeks ago.

“The price of pork, ribs and eggs has decreased compared to last month, and the price of most vegetables has increased slightly, which is a normal rise near the Spring Festival,” Luan said. “I would say all prices are within reasonable ranges.”

People choose decorations for the Spring Festival in Changchun City, northeast China’s Jilin Province, Jan. 19, 2023 (Xinhua/Xu Chang)

Fixed price covered by many

Ensuring a delicious and affordable holiday feast for Chinese like Luan is no easy feat and should not be taken for granted. Inflation was high in many parts of the world in 2022.

In June 2022, consumer prices in the United States increased by 9.1 percent compared to the previous year, the largest annual increase since 1981. In October 2022, annual inflation in the euro area rose to 10.6 percent, a record high.

But throughout 2022, China’s CPI has seen the monthly growth rate float between 0.9% and 2.8%. The index rose 2 percent annually, within the target range of about 3 percent.

The sub-index of China’s food consumer price index rose 2.8 percent year-on-year in 2022, far less than the nearly 10 percent increase in the United States and the eurozone.

“Globally, inflation is high, while domestically, prices have remained stable,” said Wan Jinsong, head of the price department of the National Development and Reform Commission (NDRC). “The contrast was stark.”

People buy vegetables at a market in Chaoyang district of Beijing, capital of China, May 13, 2022. (Xinhua/Li Xin)

Fill the “food bowl”

One of the main pillars of price stability in China is the country’s hard grain supply.

In 2022, the country’s total grain production reached 686.53 billion kilograms, up 0.5 percent from 2021, marking the eighth consecutive year that the grain yield reached 650 billion kilograms.

Global wheat and maize prices rose 74% month-on-month and 36% year-on-year, but the retail price of rice in 36 major cities in China fell 1% from a year ago, and the retail price of flour rose only 3%.

“The bumper harvest in 2022 has helped maintain overall economic stability and major economic indicators are operating within a reasonable range,” said Wang Jirong, a senior official with the National Bureau of Statistics. It has also made positive contributions to global food market stability and food security.

Other food supplies and prices remained stable before the Spring Festival. January will see more than 600,000 tonnes increase in vegetable supplies compared to December, according to the country’s Ministry of Agriculture and Rural Affairs.

The country’s continuous opening-up has also enriched the Spring Festival holiday food with lower costs. For example, China lowered tariffs on frozen blue cod, cashews, and other foods from January 1, a move to cater to the diversified tastes of increasingly affluent Chinese consumers.

Villagers thresh grains in a rice field in Lianglong Village, Hongshui Township, Rongshui Miao Autonomous County, south China’s Guangxi Zhuang Autonomous Region, September 22, 2022. (Xinhua/Zhang Ailin)

Enable fuel tank

In the first 11 months of 2022, the United States and the Eurozone saw energy prices in the inflation index rise by 27% and 38% year-on-year. However, its equivalent in the Chinese inflation index increased by only about 3 percent.

As a major energy consumer and importer, China has been able to handle the pressure to maintain energy market stability by boosting supply and coordinating demands.

The country boosted the supply and price of coal, its energy mainstay, in 2022, with production rising 8 percent year-on-year. Its crude oil production has risen to more than 200 million tons, while natural gas production has seen an increase of more than 10 billion cubic meters for six consecutive years.

Lian Weiliang, deputy director of the National Disaster Management Committee, said China has enough energy reserves and management mechanisms to help deal with peak energy use amid cold waves and the Spring Festival holiday.

“Even in extreme cases, when residents’ energy needs exceed expectations, we can activate a contingency plan to prioritize residential energy use to ensure that people’s livelihoods are not affected,” Lian said.

This photo taken on June 22, 2023 shows a night view of the coal-to-liquids plant of Ningxia Coal Industry Group Co., Ltd. (Xinhua / Feng Kaihua)

Visible helpful hand

Boosting food and energy supplies is just part of the country’s joint efforts to maintain price stability. An array of government adjusters is set in place to keep market forces on track.

In the face of downward economic pressure, the Chinese central bank adhered to cyclical adjustments, and refrained from massive “flood-like” stimulus and excessive money supply.

The state also has several effective supply and price management mechanisms, such as holding mayors accountable for a complete and affordable “vegetable basket”.

Butchers prepare meat for sale at a market in Chengdu, southwest China’s Sichuan Province, on September 2, 2022. (Xinhua/Xin Bohan)

China raised the minimum purchase price for wheat and rice last year to encourage grain cultivation. The primary meat in the country is pork. To tame the price hike, China has launched seven batches of central reserve pork into the market. Reasonable price ranges for coal and refined oil have been defined to harmonize the needs of upstream and downstream market players.

Vulnerable groups such as the unemployed and orphans who are affected by price hikes enjoyed subsidies issued by the government amounting to about 6.5 billion yuan (about 960 million U.S. dollars) last year.

“During the holiday, the trade data daily reporting system tracks the supply, demand and price changes of commodities such as grains, edible oil, meat, eggs, fruits and vegetables. We will strengthen the analysis of market operations and provide timely forecasts and early warnings,” said Sheng Qiuping, Vice Minister of Commerce of China.