Pay more for almost everything

I don’t know what kind of a country China is. It’s so strange that China, as a heavy buyer of mineral ores, soybeans, crude oils, and everything, is not in a position to set prices for those things. I read news about Chinese importers being forced to accept ridiculous price hikes charged by foreign raw material suppliers. Though I knew neither how the pricing mechanism worked on a global level nor how those price markups would affect China, it didn’t take an economist to guess that someone – most likely the average Chinese consumers – would be the last one to whom all price increases would be passed on.

Housing boom – by definition, there is no “real estate” industry in China, because “real estate” is owned by the collective and the State and is not something tradable, or should we call it “housing”? – has reached a point where most of consumers cannot afford its products. The governments at different levels, local, provincial, and national, on behalf of the State and the People rent the land to developers who build houses on it and sell them to the People. The governments also impose heavy taxes and fees – and bribes – on developers, who, together with speculators, shift all these “costs” and also markups to end users. Seemingly, the housing craze has nothing to do with higher prices of raw material imports because housing-prices going-all-the-way-up and-never-going-down-again is what characterizes the harmonious housing market in China.

Starting late last year, food prices also embarked on a growth path, beginning with pork. Almost everything edible seems to cost more. This is another acutely tangible inflation in living memory. We all have to live with it.