INFLATION IN SHANGHAI

Press, Volume LXXXV, Issue 25859, 19 July 1949, Page 5

INFLATION IN SHANGHAI

PRICE OF RICE SOARS (Rec. 7 p.m.) SHANGHAI. July 17. The price and food situation in Shanghai is nearing a crisis. The price of rice rose more than 30 per cent, to-day to 60,000 Chinese Communist dollars (about 30 United States dollars) for a 1651 b bag. At the same time tne official exchange rate increased from 1850 to 1950 Communist dollars for one United States dollar. A 1651 b bag of rice cost 11,000 Communist dollars a month ago. Th? causes of the price increase are numerous, including the Nationalist blockade, disrupted communica-

tions, floods and crop losses. Previously such price jumps were partly combated by the dumping of Economic Co-operation Administration rice at fixed prices, but there is now no E.C.A. rice in Shanghai. The Shanghai correspondent of the Associated Press says that a huge number of rice-eating Chinese will have to start eating something else. Alleady the Communists are shipping hundreds of tons of soya beans from the north. Employers claim that they cannot possibly increase their payrolls to meet the rice price increases, and the authorities now are considering shifting wages from rice to some other food index.