Chinese inflation rises to highest rate in 11 years

Food prices in China rose about 18 percent, pushing inflation there to the highest rate since 1996.
HONG KONG: Consumer prices rose 7.1 percent in China last month, the largest increase in more than a decade.

The steep increase in prices, announced Tuesday by the Chinese government's National Bureau of Statistics, is the latest warning sign that China has been transformed from a moderating influence on global prices to a source of inflationary pressure.

Chinese exporters are trying to pass on their rising costs to overseas customers, which could contribute to inflation in the United States and Europe.

"Our company is faced with rising labor costs and raw material costs," said Michelle Yin, a sales manager for the Shanghai Yongqiu Compressor Company, which makes walk-in coolers and freezers and exports to the United States and Europe. "Depending on the margin we get from individual customers, we have been able to pass on all or part of the cost increase. For new customers, we typically have to set prices more aggressively to get their business.
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