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Last Updated: Monday, 13 August 2007, 06:22 GMT 07:22 UK
China inflation hits 10-year high
Chinese food store
Chinese food prices rose sharply last month
Chinese inflation soared to a 10-year high of 5.6% in July, led by a sharp increase in food prices.

The price of pork and other meats jumped 45% compared with the same month a year earlier, while eggs rose 31%.

July's annual inflation rate was the highest since February 1997, and was up from June's rate of 4.4%.

The latest inflation figure is likely to mean more Chinese interest rate rises. Rates have already risen three times in the past six months.

Free vaccinations

The increase in the price of food is politically sensitive for the Chinese government, as it hits the poorest levels of society the hardest.

Beijing has already promised to hand pig farmers free vaccinations for their animals after a recent spate of disease outbreaks reduced the supplies of pork reaching the marketplace, leading to upward price pressure.

Chinese authorities have also ordered investigations into whether farmers or food companies are colluding to push up prices.

Chinese inflation is also being fuelled by the country's economic boom that saw the economy expand at a breakneck 11.9% from a year earlier in the April-to-June quarter.

However, the main Chinese statistics bureau stressed that the price of clothing and other non-food items was up by only 0.9% in July from a year earlier.

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