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27 Aug, 2011

Is over-urbanization causing China’s inflation? – People’s Daily Online

China’s Consumer Price Index (CPI) rose nearly 7 percent in July from a year earlier, hitting a new high. Certain people believe that over-urbanization is at the root of China’s inflation, arguing that urbanization leads to the loss of agricultural land, a massive influx of rural labor to urban areas and increased consumption of resources. These factors have jointly pushed up the prices of resources, food and services, thereby raising inflation expectations. Is the country’s inflation really caused by over-urbanization?

China’s modernization, driven by marketization and urbanization, has long been plagued by inflation, but it is far-fetched to say that over-urbanization is the root of China’s inflation.

via Is over-urbanization causing China’s inflation? – People’s Daily Online.