For information
(17.1.89)
Background
CONFIDENTIAL
Blue Vol.XXXIV (18)
XCX (89) 3 Copy No..
28
NOTE FOR EXECUTIVE COUNCIL
INFLATION IN CHINA AND ITS IMPLICATIONS FOR THE ECONOMIES OF CHINA AND HONG KONG
owing
Following discussion of the memorandum XCX(88) 124 on this subject on 8 November 1988, the Council advised and the Governor ordered that an updated submission should be prepared in one
months' time. This not e covers possible developments since the previous submission.
to two
Current rate of inflation in China
2
as
far
as
Measured in terms of retail prices, the rate of inflation in China was 17% in the first ten months of 1988, and was still accelerating, as indicated in the table below.
Rate of increase in retail prices (compared with the same month in 1987)
China
(%)
Jul 1988
19.2
Aug 1988
23.6
Sep 1988
25.4
Oct 1988
26.1
32 large and medium sized cities in China
(%)
22.6
27.4
29.5
31.0
In November, however, it may have
have shown the
the first signs of peaking when the year-on-year rate of increase for the retail prices in the 32 large and medium sized cities was 30.3%, i.e. There have 0.7 of a percentage point lower than in October.
been reports that the corresponding rate of increase for China as a whole was 23.5%, i.e. more than two and a half percent age points lower than in October.
CONFIDENTIAL