(Xinhua)
Updated: 2008-02-06 17:32

HOHHOT - Millions of Chinese low-income families are embracing the most important festival of the year, the Chinese Lunar New Year which falls on Thursday, with a frown as food prices continue to rise.

Local residents buy pork at Xinhua Shopping Center in Yinchuan, Northwest China's Ningxia Hui Autonomous Region, February 5, 2008. [Xinhua]

"The food price is rocketing. I spent the same amount of money as last year to prepare for the festival, but I bought fewer things." said Liu Guiying, a 43-year-old cleaner in Hohhot, capital of northern Inner Mongolia Autonomous Region.

Although the price of pork has gone up to 24 yuan per kilo, almost twice as much as last year, Liu Guiying, who relies on a monthly 230-yuan(US$32) subsidy from the government, added pork to her stock list.

Like Liu, China has 100 million people living on less than one US dollars a day, most of whom are farmers and low-income residents in the city. They have a tight budget to make ends meet in the coming holidays.

With the pork price rising, China's inflation barometer, the Consumer Price Index (CPI) rose 4.8 percent in 2007 and hit an 11-year high of 6.9 percent in November, well above the government target of three percent.

Li Huiyong, a senior macro-economic analyst at Shenyin and Wanguo Securities, predicted the CPI would possibly set a new high in February as the traditional time for shopping sprees among Chinese, the Spring Festival comes.

To ease the negative impacts of the price rises on the low-income families, Chinese finance and civil affairs ministry has improved the subsidy to the low-income residents in the city three times in 2007, with an average increase for 30 yuan per person.

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