BEIJING - The spiraling prices have made the store a place of fear for Chu Yun, an office of 27 years of age.
"Prices of everything are going up and it never seems to stop," Chu said while hunting for bargains in a supermarket. "I have no confidence in prices may be under control this year. I think it will go up."
public of China is struggling with increased food prices monthslong has challenged the government's efforts to fight inflation with increases in interest rates, price controls and a campaign to increase production of vegetables and grains.
On Tuesday, the government reported inflation accelerated in January, reaching 4.9 percent from 4.6 percent in December. That was driven by a 10.3 percent jump in food costs amid tight supplies and strong demand.
Economists expect the strongest price rises in coming months as China faces a problem that can not quickly fix: Demand is outstripping food supply, while high global commodity prices means that can not fill the gap with imports cheaply.
"Inflation is unlikely to come down considerably in the first half of the year," said Mark Williams of Capital Economics. Analysts expect more rate hikes, but Williams said that on their own, "they will not bring more crops to market."
Inflation is dangerous for the leaders of China, and that erodes the economic benefits that support the claim of the Communist Party in power. It comes to the poor majority more difficult in a society where millions of families spend up to half of their income on food.
This is politically awkward as Beijing tries to impose stability before delivery once the power generation next year for young leaders of the Communist Party.
"The political backdrop of the transition is of paramount importance in the minds of politicians," said Dariusz Kowalczyk, chief economist at Credit Agricole CIB. "They realize people are still poorer than most of the people of China are affected by inflation to a greater extent than they benefit from growth."
Beijing has tried to appease the public by paying food subsidies to poor families, keeping prices in the cafeterias of the university and ordered local leaders to see that the vegetable markets are adequately supplied. It has tried to spread public frustration alleging monopolization and price fixing by speculators is partly to blame.
But analysts say Beijing does not act quickly enough to contain inflation after the 2008 crisis diverted by flooding the economy with the stimulus money and bank loans. The economic recovery gave consumers more money to spend and banks are pumping loans despite orders to curb credit.
Beijing has raised interest rates three times since October, but economists said more rate hikes are necessary, it will be months before the effect is.
"It seems that Chinese authorities are behind the curve in fighting inflation," Kowalczyk said. "They've been too cautious."
The numbers of hidden inflation increases even more acute in the key points.
In January, the price of fresh fruit rose by more than a third over the previous year, while eggs rose by a fifth, the National Bureau of Statistics reported.
In Xinya Center mall, a supermarket in the area east of Beijing, the price of sugar is 80 percent over the previous year, while the high quality rice costs 65 percent more, according to director Wang Yongyi.
"Since the second half of last year, we have been busy changing the price tags to mark prices," Wang said, "It seems that the more control we have had from the government, the highest price increase."
Inflation could be extended to higher prices for Chinese exports. This could raise costs for Western consumers, but also could help countries like Vietnam and India compete with China, suppliers of clothing, furniture and other goods at low cost.
Global Sources, a company that connects to Chinese suppliers with foreign customers, said this week that a survey of 232 Chinese firms found 74 percent of them raised prices last year - some up to 20 percent - due to higher costs of materials and components.
"China is constantly moving away from being the world's supply of low cost of various products," the company said in a report released this week.
An independent survey of 385 Global Sources foreign buyers last month found 31 percent were increasing purchases of Vietnam due to rising Chinese prices.
Rising inflation can also lead Beijing to curb the rise of its currency, the yuan, against U.S. dollar to help exporters compete. That could add to strains with Washington and other governments complain that the yuan is kept undervalued, giving China's exporters an unfair advantage and adding to its huge trade surplus.
Adding to pressure on food supplies in northeast China is facing a devastating drought that threatens the harvest of winter wheat. World wheat prices are high, limiting Beijing's ability to fill the gap by increasing imports at a reasonable price.
The government has launched a campaign of $ 1 billion to save the harvest with the emergency irrigation and seeding clouds to make rain.
"I hope the government can control the food prices rises this year, or people's lives will be affected greatly," said Wang, the manager of the supermarket. "No matter how high prices go, people need to eat anyway, right?"
