China fights famine, ants collect food when it is sunny, what about Sri Lanka?

January, 19, 2022

The Silk Road Journal by Mahika Ming

The Producer Price Index (PPI), reflecting the cost of goods at the factory gate, rose by 10.3% in December YoY (Ref. Chinese NBS). Bloomberg's prediction was 11.3% growth while Reuters was 11.1% but the Chinese authorities managed to keep it lower than the western prediction. Chinese authorities adopted policies to secure supply and stabilize prices. Therefore amid high raw material prices and the drop in oil prices etc. the market reported above situation. In China the Factory inflation eased from a 26 year high of 13.5% by October 2021. The consumer price index (CPI) of China (an indicator of inflation), has increased by 1.5% YoY in December. Due to the lower food costs the value has actually lowered from November as per NBS. Bloomberg and Reuters predicted 1.7% and 1.8% respectively for CPI China but that also has not reached the levels as the western institutes expected. Food prices also fell by 1.2% compared to December 2020. Pork prices dropped by 36.7%  in December and vegetable prices increased by 10.6% but still it was a decrease from November 2021. Price of eggs, freshwater fish and vegetable oil has however, increased by 14.2%, 16.7% and 9% respectively as per NBS. Even with price reductions Chinese authorities have not given up the fight against rising inflation as per NBS. Non food prices however, increased by 2.1% in December which is a decline of 0.04% from November. China has managed to control the CPI when it rose by 0.9 percent during 2021 which again is a reduction from the 2.5% increase in 2020.

China has been helping Sri Lanka to fight famine since 1952 with the signing of the Rubber Rice Pact. Although a super power, the struggle of the Chinese authorities to keep cost of living under control through various means in commendable. One should remember that China has to feed more than 1.4 billion humans on a daily basis. That is approximately 20% of the global population. It is therefore, a lesson for Sri Lankans to study how China fights famine using their own fertilizer and strict government interventions. Sri Lankans may question their representatives on how the individuals eat heavy meals at very low costs at the parliament, drive very expensive automobiles and trot the globe while the country is in a crisis. The nursery rhyme says that the ants work hard when it’s sunny to collect food. Probably in Sri Lanka those who have done aren’t worried about the rainy season. Thus bread rates fluctuate on a daily basis like gold.

The writer is an analyst with interests in the financial and sustainable development sectors with postgraduate exposure in the Far East (mahika.ming@gmail.com).