Interesting Bloomberg Businessweek blurb that says most Chinese prices are false ("What's a pork rib really cost in China?"), meaning most people pay more for things--especially food--than the officially-listed prices would have you believe.
Officially, China's consumer price index rose 3.3% in July. I mean, how can an economy grow 10% and wages go up an average of 8% and consumer goods go up only 3-4%? With so many rural folk moving to the city, and the second-tier cities taking off, all signs point to rising costs across the board, and yet China's stats remain unusually flat.
The always-solid Michael Pettis says the real inflation rate is more like 6%.
Point being: either the Chinese government is clueless or is simply ignoring the problem. Either way, not a good sign, because when inflation saps wage growth in China, social unrest tends to follow.
More than a few experts say China simply likes to repress numbers on inflation and unemployment--no matter what the circumstances. So expectations are that China's inflation rate--officially--is already set at 3% for the year.
What this suggests to me: far too much of the Chinese miracle is based on false data, because there exists system-wide pressure to hit certain numbers--with 8% growth being the magic talisman.