Chinese businesses adjust to fuel price hikes

China’s recent increase in fuel prices has forced some businesses to improvise and reduce consumption. Apart from fruits and vegetables, Xinfadi, the largest wholesale market in the Chinese capital, also supplies eggs, flour, oil and rice to supermarkets, staff canteens, and restaurants. To cope with rising fuel costs, some distributors have stopped importing produce from faraway provinces such as Hainan, Guangdong and Guangxi. Instead, they opt for produce from provinces nearer to Beijing, such as Hebei and Shandong, which would incur lower transportation costs. Analysts predict that inflation will be moderate in the second half of this year, adding that the government’s decision to raise fuel prices before, instead of after the Beijing Olympics, shows that it is less worried about inflation. (July 3, 2008)