Want To Know What's Up With China's Low Inflation? Look At Pork
According to the Wall Street Journal, pork prices make up about 10-15 percent when measuring CPI and inflation.
Since pork prices fell 4.3 percent last year, this could be a key reason why consumer inflation has seen surprisingly low growth, at an average of 2 percent for 2014. Other causes include falling oil prices and a slowed housing market.
The article connects the decline in pork prices with Chinese President Xi Jinping's campaign against corruption and extravagant spending. Households are cutting down on pork, which is a large part of the Chinese diet.
"What's different this time around is that the government's [anti-extravagance] campaign has changed pork consumption and thus the cycle of pork prices," economist Zhou Hao told WSJ. "Things are different now. I just don't see any signs of recovery in pork prices any time soon."