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TO THE POINT: The inflation in China‚s mainland cast a shadow over Chinese economic performance. Most recently, it was further jacked up by rising electricity and refined oil prices. The mainland refined oil prices were edging up in line with international levels, putting more pressure on consumers. One-year iron ore prices also lifted substantially up 96.5 percent. China Development Bank was determined to buy more Barclays shares, ignoring market uncertainties. Merrill Lynch warned of risk growth in 2009.
By LIU YUNYUN
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Chain Effects of Oil Price Hikes
Chinese mainland refined oil price hikes have caused a series of chain effects on both major oil consumption enterprises as well as people’s lives, resulting in jitters about inflation.
Beginning on June 20, the benchmark gasoline and diesel oil retail prices were marked up by 1,000 yuan ($145) per ton, while the price of aviation kerosene was up by 1,500 yuan ($218) per ton.
The Central Government controls refined oil prices. The last time such hikes took place was last November, when international crude oil price reached around $90 per barrel. The international oil price has surged nearly 50 percent since then.
Inflation is expected to go up along with oil prices. Merrill Lynch & Co. Inc.published a report on June 20, arguing that, although the National Development and Reform Commission (NDRC) forbids price increases in public utilities and taxies, the impact of such hikes will be quickly passed on to consumers through other channels, especially food prices in urban areas. Merrill Lynch thus raised its annual consumer price index inflation forecast in 2008 to 7.5 percent from the previous 6.9 percent.
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