China's consumer price index (CPI) rose to 6.5 percent in July 2011, indicating that inflation is continuing. The CPI increase is being driven largely by the price of food, which accounts for a considerable portion of household expenditures. The continuing inflation in China is fueling concerns of potential social instability. Although Beijing earlier had said that inflationary pressure would be eased earlier this year, the latest numbers suggest the inflation will continue, if not increase, through the end of the year, making it unlikely that Beijing will reach its goal of curbing annual inflation to within 5 percent. This has complicated the central government's plan to shift to a more growth-driven policy after easing inflation, and the volatile global economic outlook only complicates Beijing's economic plans.
