Huge flurry of news reports out there since yesterday when the NBS released the inflation numbers. Yikes, CPI up 6.5% in October. On a personal note, if you add to that the hit I took when my October salary was converted to USD, which amounted to a penalty of hundreds of RMB, I am getting screwed eight ways from Sunday. That's economics terminology for "Give up and go buy some precious metals."

Of more concern to most folks, and to everyone in government who for some reason cannot get any sleep these days, is the 18% rise is food prices (year-on-year). This is scary. Not to be overly dramatic, but you do recall a couple of other occasions when price inflation got out of hand? One instance was in the late 1940s, the other the late 1980s. I'm not comparing today's situation with those, but suffice it to say that when food gets expensive fast, people get hungry and pissed off, and that's never a good thing.

The other big econ story concerns the FDI numbers, which contrary to some opinions, seems to be humming along quite nicely. October saw a 13+% increase in inward FDI, so at least the foreign money guys have sufficient confidence that all is hunky dory here.

An excellent writeup on these issues, as usual, can be found at China Economics Blog.