China's monthly economic statistics for April showed a 2.8 percent increase in consumer price inflation, confirming expectations that inflation would increase in tandem with efforts to fuel an economic recovery. The April inflation rate exceeds the one-year savings deposit rate of 2.25 percent (meaning that the incentives to spend, as China attempts to build a consumer economy, are becoming greater than incentives to save), but overall inflation remains below the 3 percent level, at which the government would raise a red flag. Inflation concerns are most striking in the food and housing sectors — areas where social effects are most likely to be pronounced. Without accounting for food price increases, the inflation rate was near 1 percent.
