Wednesday, December 14, 2011

Unrest in South China

FT has a video report on unrest in a sector of South China.

A Chinese man accused of participating in a riot over land claims has died in police custody, fanning tensions.

This unrest should not be viewed in isolation. There has been much unrest in China, particularly because of climbing prices. Which suggests the price inflation in China is much higher than the official reported rate of around 5%.

Many believe that China will again begin to increase the money supply in an effort to halt the declining economy, however, the unrest over climbing prices makes it very dangerous for the People's Bank of China to print aggressively and risk fanning price inflation even more.

The FT clip is here. Although the FT report doesn't deal directly with the unrest over prices, it does provide a sense for the tensions and willingness of Chinese citizens to confront the police in the overall price inflationary climate. Note at the end of the clip, the villagers pick up sticks and beat back police attempting to arrest one man.

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