China's spicy bubble

26 May 2010 By Wei Gu

A pungent version of tulip mania is on display in China. Garlic was possibly the country’s top performing asset in 2009, up more than 500 percent. Prices have softened a bit after Beijing threatened to intervene. But if liquidity keeps flowing, there will be all sorts of bubbles.

This content is for Subscribers only

Context News

China will be able to keep the fullyear growth in its consumer price index (CPI) at about 3 percent, the National Development and Reform Commission (NDRC) said on May 24. Vegetable prices, which helped to push China's consumer inflation to an 18month high of 2.8 percent in April, would fall in coming months as supplies increase, said the planning agency.

The NDRC said in midMay it has taken the sharp price rise of garlic and green beans very seriously. It has sent several teams to their main production and sales bases to investigate the matter. It believes supply has fallen mainly because prices dropped too much in previous years, but stocking and speculation have also played a role.

Email a friend

Please complete the form below.

Required fields *