Amid the trade war, watch for inflationary risks in China: JP Morgan's Ulrich

SINGAPORE (Oct 25): The trade war between US and China has hogged headlines for the better part of the year. But amid all the new salvos of trade tariffs, China’s policymakers are to be mindful of another risk: Inflation, warns JP Morgan Asia Pacific’s vice chairman Jing Ulrich.

In China, a third of the consumer price index basket comprises of food. Pork is practically a staple. But bouts of swine flu have driven up pork prices. So has the trade war started by US president Donald Trump. Soybean – imported from US by Chinese pig farmers as feed – is in Beijing’s retaliatory tariff list. This hurts not only a key base of Trump voters, but also Chinese farmers and consumers.

“The joke is that CPI stands for consumers’ pork index,” quips Ulrich, in a recent interview with The Edge Singapore. Since May this year, China’s monthly inflation year-on-year growth rate has been creeping up. From 1.55% in May, the figure went up to 1.75% the following month, then 2.14% for July, 2.32% in August and for September, 2.4%.

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