BEIJING (Reuters) – Chinese pensioner Wang Li endured two chilly hours on a pre-dawn bus to Beijing's biggest wholesale food market to stock up on dried seaweed, one more food hit by inflation rippling across the country.
Explanations and forecasts for China's recent spike in food prices are as varied as the vegetables and fruit piled on thousands of stalls and trucks in the Xinfadi open-air market on the southwest outskirts of the national capital.
Wang said whatever the reason, the Communist Party government had a duty to set it right and ensure residents need not worry about eating their fill.
"If this continues, it could hurt social stability. People don't just complain about prices as such, it makes them more sensitive about corruption and the gap between rich and poor," said Wang, a grey-haired 60-year-old wearing the dark blue jacket that was a uniform for his generation of Chinese workers.
"The government should do more than just shout slogans. It has to protect farmers and workers and punish the speculators," he said.
"I came here because the food is about half the price of a supermarket," he said, with a woven sack of seaweed -- a popular ingredient for soups and stews -- and vegetables at his feet as dawn broke. "But it's a long ride, and that shows how hard-up ordinary people feel."
China's Communist Party leaders, jittery about even mild signs of public unrest in cities, are well aware of the concerns.
In recent weeks, Beijing has announced measures to douse price rise pressures after inflation jumped to a 25-month high of 4.4 percent in the year to October. Food costs rose 10.1 percent in the period, while non-food inflation was just 1.6 percent higher.
"These tomatoes are rising in price no matter what the government says," said Liu Jie, unloading crates of them in the Xinfadi market. "The cold weather will drive up prices."
The government worries not only about the dampening effects on economic growth. The country's history has plenty of stories of sharp price rises triggering unrest even the end of dynasties.
In 1988 annual CPI jumped 18.8 percent, magnifying discontent in the build-up to widespread anti-government protests in 1989.
Over two decades later, the end of the Party is nowhere in sight and its leaders want to ensure it stays that way.
Their recent inflation-fighting announcements, widely publicized by state media, have been as much reassuring political showmanship as policy craftsmanship.
"In order to truly protect the fundamental interests of the broad public and maintain social harmony and stability, all areas and all departments must fully grasp the importance and urgency of stabilizing market prices," the State Council, or government cabinet headed by Premier Wen Jiabao, said over the weekend.
Wen, who was a central government aide in the late 1980s, put it more directly earlier this year.
"I've grasped from all my years of political life that there are two problems which can threaten social stability and even the steadiness of the government. One is corruption, and the other is prices," he told an online discussion in February.
Wen said he checked on prices of rice, flour, pork, and vegetables every day. "I know prices are bound up with our lives," he said.
PLENTY OF VEGETABLES, PLENTY OF REASONS
Wen's challenge is that those prices are also bound up with China's increasingly complex market economy, which does not respond obediently to political commands.
In the Xinfadi market, merchants shouting in the accents of China's rural heartland offered a rainbow of explanations for the recent price rises.
Some blamed growing exports, especially to South Koreans hungry for cheap Chinese cabbage to make kimchi. Others blamed bad weather, although there has not been much of it this year. Some said the weather had been too cold, others said too warm.
Only one of dozens of merchants interviewed offered the kind of explanation that China's officials might like to hear.
"The papers say it's because the U.S. dollar has depreciated. They're printing money like it's dirt," said Liu Jing, a whiskery man who had peddled a three-wheel cycle to the market to restock his small stall with mushrooms.
Wholesalers who trucked vegetables and fruit from farming provinces argued more plausibly that rising costs for fuel, fertilizer and the plastic sheeting used to protect many crops are feeding through to food prices.
"We're selling more expensive because we're buying it more expensive," said Li Zhongde, who had brought two trucks loaded with garlic buds from eastern Shandong province, a day's drive from Beijing.
"The transport costs are huge. A truckload doesn't earn more than a pittance," he said. "You pay more for fertilizer, plastic, water, fuel. It all adds up and someone has to pay for it."
Li had a hard time persuading customers, some of them reluctant to pay 7.4 yuan ($1.1) a kilo for garlic buds.
Numbers suggest Li's explanation is right.
Last year, labor costs to produce and supply vegetables sold in big cities rose 11.5 percent and land costs by 17.7 percent, according to statistics published by the National Development and Reform Commission, a policy-setting agency that also monitors prices.
More recent statistics are not available, but rises in fuel costs and the squeeze on land as urbanization spreads may have boosted costs this year.
DON'T PANIC
Li and other merchants doubted the government's drive to hold down prices would have much effect in coming months, a time when cold and the approach of Lunar New Year banquets usually push up some food prices.
But the government had no need to panic, said one merchant selling cabbages for 0.8 yuan a kilo, which he said was about double last year's price. He would not give his name.
"Even if they don't like it, people still have to eat," he said. "They'll complain, and be more picky about what they buy, but they won't rise up. Not for cabbage."
($1=6.64 Yuan)
(Editing by Don Durfee and Jonathan Thatcher)
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