By Linda Young

Beijing, China

China's inflation rate rose to a 3-year high in July, which was higher than expected despite government efforts to control price increases.

Beijing had taken a series of steps designed to keep prices from continuing their upward trend. However, those efforts failed and consumer prices rose by 6.5 percent compared to the same month a year earlier, according to the National Bureau of Statistics. That was also an increase from the previous month's 6.4 percent rise.

Much of the increase in China's consumer price index was from food, with pork prices alone going up by 57 percent. Pork is a staple food in China and it counts for one-third of the food price index. However, pork prices are expected to drop as more farmers respond to the high prices by bringing more hogs to market within the next few months.

Nevertheless, overall food prices increased by a hefty 14.8 percent compared to a year earlier.

However, the inflation rate excluding food prices was a more moderate 2.9 percent.

Among the failed steps that China's government took were actions from the central bank that included increasing the benchmark interest rate five times since last October and ordering the nation's banks to up cash reserves to 21.5 percent.

 

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World - China Sees Inflation Rate Hit 6.5% | Global Viewpoint