WILD INFLATION IN CHINA

Greymouth Evening Star, 12 February 1947, Page 7

WILD INFLATION IN CHINA

Prices Sky-Rocket As . Money Values Fall (Recd. 11.35 a.m.) SHANGHAI, February 11. Complete economic confusion resulted to-day when the Chinese dollar fell to a new low level. The exchange market opened at 13,500 Chinese dollars to one American dollar and closed at 18,500. Ten-ounce gold bars sold for 9,000,000 Chinese dollars. The wild inflation is causing storekeepers to raise their prices by 50 to 100 per cent. Frantic efforts are being made to buy and hoard rice; otherwise business is paralysed.

Prices soared in other cities when they received the news of Shanghai currency depreciation. Everywhere the price of rice skyrocketed. What caused the. currency fall is not clear. Some blame the recent move to subsidise exports, which back-fired by causing the price of exportable merchandise to jump and which ran counter to the American and British import regulations. Others believed that China’s Central Bank had exhausted its gold supplv while yet others attributed the situation to America’s abandon-

ment of her peace efforts in China. Generalissimo Chiang Kai-shek has summoned leading economic experts for an urgent review of the nation’s financial crisis. Three thousand Communists raided Peking yesterday, taking the Government defenders by surprise. The Communists set fire to Government buildings and freed 68 prisoners from the gaol. The pro-Government newspaper, Hain Min Pao, reported that 200 are dead in the streets. A Government armoured train helped to rout the invaders.