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Food price inflation has driven general CPI price rises for the past year. Things, especially food, are getting more expensive, and it is starting to be passed through.

Last year the city of Lanzhou in Gansu province encountered a popular and political backlash. Shops selling the local delicacy of Lanzhou Beef Noodles were accused of collusion and price fixing as an overnight hike of noodle prices, a response to rising wheat, oil, beef and seasoning costs, was met with suspicion. The city government mandated a large bowl must not exceed 2.5 Yuan and the difference between a large and small bowl must not exceed 0.2 Yuan. Noodle shops are not a high margin business, as prices were capped the amount of contents contents inevitably reduced in size.

Two weeks ago, after enjoying a bowl of 米线, Mi Xian or rice noodles (cooked in a chicken or pork broth with tofu skins, vegetables and slices of chicken breast) the shop owner regretfully apologised for the price rising 2 Yuan from 10. He explained the price rise was essential for him to remain in business. For more than 3 years he'd charged 10 kuai for a large bowl/pot.

Roddy noted the filling of his dumplings was going down, an alternative way for retailers to deal with the soaring cost of ingredients. The Zhongshan Hotel have a notice on each of their tables telling guests to add 10% to food costs because of recent ingredient price inflation. Even Kailong, the king of cheap beers, went up 25% in price to 2.5 Kuai several months ago.

This is important phychologically. Not only are prices in the market going up, food prices are being felt outside of home too. It isn't just food prices, power stations made losses in the first quarter of the year as coal prices soared yet higher electricity prices was mandated not to be passed on to consumers - a 1% rise in the cost of electricity directly causes a 0.089% increase in general CPI according to the China Daily. Inflation expectations cause inflation, expect a bunch more.

Pic: Typical Northern Chinese 包子, now with less filling.

Pic: CC lincence, attribution, sharealike.

Related: An introduction to 米线 and an explanation of why the dog ignores the dumplings, or 狗不理包子.