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China Times: Complaints over food price hikes
Central News Agency
2014-03-14 10:46 AM
Public complaints are mounting in Taiwan in the wake of recent hikes in the prices of essential food items including vegetables, fruit, fish, meat and eggs. An especially sharp increase has been seen in the prices of pork, which accounts for 50 percent of domestic meat consumption. This is due mainly to a temporary shortage linked to a disease outbreak affecting the piglet population. In fact, Taiwan's consumer price index (CPI) in February dropped 0.05 percent from the year-earlier level after taking into consideration all 370 categories of products surveyed. But the decrease was completely overwhelmed by a 2.54 percent rise in the prices of food, which mostly affects the general public. From 2010 to 2013, Taiwan's CPI rose 0.96 percent, 1.42 percent, 1.93 percent and 0.79 percent, respectively. The CPI even fell 0.86 percent in 2009. All these figures indicate that prices in Taiwan are unusually stable compared with neighboring countries in Southeast Asia, where the inflation rates are over 3 percent. Because of its low consumer prices, Taiwan has become one of the most popular travel destinations for young people from Japan, Hong Kong and Singapore. Many tourists from China also think prices are cheap in Taiwan. But we should not keep pursuing low prices, as they are largely responsible for Taiwan's stagnant salary levels over the past two decades. This vicious circle has led to a brain drain in Taiwan. According to the Phillips curve, an economic concept developed by A. W. Phillips, lower unemployment in an economy is correlated with a higher rate of inflation. In other words, Taiwan's jobless rate is unlikely to drop unless prices increase. We should let the market decide prices, including the rates of public utilities. Government intervention in prices will hamper an efficient redistribution of resources and impede social progress. (Editorial abstract -- March 14, 2014) (By Y.F. Low)
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