Will Wen Jiabao take the fall for China's soaring inflation?

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We here at Zhongnanhai don't really like to rumor-monger, which is why I've been holding out on this one for so long. But what's the point of a blog if we can't throw stuff out there?

I mentioned late last year that there may be some high-level government staffing changes announced in March. For the record, nothing has been confirmed. But speak to any foreign journalist in Beijing, and they are all working to confirm the same tid-bit of information.

Rumors that Wen Jiabao may not make it through his second-term began circulating early last year, after a report in the Japanese press. It turned out that those reports were false, and Wen was not removed from his post during the 17th Party Congress in October. But rumors of Wen's future have been persisent since, with some claiming that Wen will be relieved of his duties as a result of China's inflation problems.

With this in mind, we are treated to a story in the Chinese Financial Times, called "Beijing wages a psychological war against spiralling prices", regarding China's inflationary challenges. What stood out to me were these two paragraphs:

By contrast, say Chinese officials, the inflation measures have come from the office of Wen Jiabao, the premier, who has hitherto not displayed decisive leadership on the economy.
If inflation did persist and lead to widespread civil and political unrest, Mr Wen would ultimately be held responsible.

Of course, inflation was a key contributor to another period of unrest in China's history, sometime around the late 1980s. There's no doubt that prices are going up for gasoline, food, and housing -- and going up quickly.

Zhongnanhai makes no prediction on the future of Wen Jiabao, except to say that the chattering classes have zeroed in on him as the culprit for China's inflation problems. We'll see where this story leads.



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This page contains a single entry by Cam published on January 22, 2008 10:44 AM.

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