Understanding China, One Blog at a Time

An American in China

China’s Epic Drought Impacting Grain Prices

Posted by w_thames_the_d on May 30, 2011

Inflation is a prime concern for China’s communist party. The severe drought, in places the worst ever is hammering Chinese fields and crops. The result is climbing inflation and a gut wrenching fear for the communists. The issue is that when prices spiral out of control then companies cannot produce, or produce less which leads to layoffs which leads to unemployment which in China leads to very bad things. It has been reported that some vegetable prices in China have increased 16% in the past two weeks alone. In addition, the People’s Bank of China will raise interest rates, or so it is expected, in July. Things look a bit sketchy on this side of the pond…

This is what a lake looks like in China now. The last time China did this to herself was during the disastrous great leap forward where 30-50 million people died from starvation and such. Although global warming is an issue, the question is how much China has precipitated this occurrence due to mismanagement of her resources, dam buildup and outright greed.


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