高盛：China Views－CPI inflation on the rise

May 25, 2007 3页

1. There have been media reports of surging meat prices in mainland China since
early May 2007, suggesting upside risks to CPI inflation for the coming months. An
increasing number of cities, including Beijing, Nanjing and Guangzhou have
reported a fast rise of meat prices, beginning with pork but appearing to spread
quickly to other meat products such as poultry and beef. The media cited month-onmonth
increases between May versus April in a range between 10%-30% for pork,
and the inflation momentum picked up noticeably after mid-May.
2. The Ministry of Agriculture cited the following factors for the rise of pork prices: 1)
rising prices of feed stock such as corn; 2) inadequate supply of pork by farmers
because of depressed prices last year; and 3) rising demand for pork because of rising
wage income. While we believe meat supply can catch up relatively quickly (usually
within 6 months), the other two factors (1 and 3) cited by the ministry suggest more
inflation pressures may be in the pipeline. That is, upstream cost inflation is passing
through to prices