China Focus: Consumers pinch pennies to cope with soaring prices

China Focus: Consumers pinch pennies to cope with soaring prices

NANJING, July 22 (Xinhua) -- Price rises in everything from foodto daily necessities are making Chinese consumers, particularlythose in middle- and low-income brackets, ever more cautious abouttheir expenditures.

Sun Guilan, a 54-year-old babysitter from east China's city ofSuzhou, recently tracked her daily expenditures and was not pleasedwith what she saw.

"One kg of beans costs 8 yuan (1.24 U.S. dollars), three packagesof facial tissues cost 12.5 yuan. It's becoming harder and harderfor us to make ends meet," she complained.

Sun earns 1,000 yuan per month, with her retired husbandreceiving a monthly pension of about 2,000 yuan. With inflationremaining high, their wallets are getting lighter.

According to the latest figures released by the National Bureauof Statistics (NBS), China's inflation escalated to its highestlevel in three years in June, with the consumer price index (CPI), amain gauge of inflation, jumping by 6.4 percent year-on-year thatmonth.

Food prices, which account for nearly one-third of the basket ofgoods used to calculate the CPI, continued to rise by 14.4 percentin June year-on-year, an even higher rise than May's increase of11.7 percent.

The surge in food prices has prompted many buyers to carefullystudy price tags before taking their goods up to the counter.

At a supermarket in east China's city of Nanjing, a salesmannamed Yu Wei chose to buy only must-have necessities such as shampooand mosquito repellant. He said the increase in food prices has beentoo sharp.

"We used to spend about 10 yuan per day on vegetables for thewhole family. But yesterday, it cost me 17 yuan just to buy a fewears of corn and some cabbage. Pork prices are also way too high,"he said.

According to the NBS figures, pork topped the list of goods withincreased prices with a price increase of 57.1 percent, which hauledthe overall price level up by 1.37 percentage points.

Farmers have attributed the rise in pork prices to the climbingcosts of pig feed and labor. Prices for corn and rice bran, thefoods most commonly fed to the pigs, rose by 12.4 percent and 20percent, respectively. The average monthly wage for a single farmlaborer has reached 2,000 yuan this year, an increase over lastyear's figure of 1,500 yuan.

As prices continue to increase for a variety of food and goods,consumers have been forced to change their consuming habits and findnew ways to save their money.

"I download e-books on the Internet now instead of going tobookstores, and I take walks to exercise instead of going to thegym," Yu said.

Moneysaving tips are currently among the hottest topics onChina's online forums. Discounts, group-buying opportunities andsuggestions for avoiding impulse buying have been widely spread andshared by the country's netizens.

Han Li, a white-collar worker from east China's city of Hangzhou,is a big fan of fashion magazines. In order to avoid spending toomuch money on the magazines, she and her friends have decided totake turns buying the magazines, sharing the copies with each otherwhen they finish reading them. Han has also signed up for free trialprograms offered by cosmetics companies.

"You can save hundreds of yuan on lotion if you join the freetrial programs. You need to have some wisdom when you're dealingwith the soaring prices," she said.

The government is also seeing what tricks it has up its sleeve.To cool down the soaring prices, the People's Bank of China (PBOC),the central bank, has raised its benchmark interest rate three timesso far this year. It also raised its reserve requirement ratio sixtimes in the first half of 2011, ordering banks to keep a recordhigh of 21.5 percent of their deposits in reserve to rein in excesslending.

Although inflation has remained high despite the government'sefforts, economic experts are confident that China will find a wayout.

"Managing inflation and inflationary expectations is a major testfor China during its transformative process. We must look to thegovernment to remove inflationary pressure," said Shao Xiaoying, anassociate professor of social science at Shanghai's FudanUniversity.