Chinese inflation slowed in December, as the government’s campaign to rein in lavish spending by officials made an unexpectedly big impact on the wider economy.
Food prices, the biggest driver of inflation in China, usually rise strongly at the end of the year as government agencies and state-owned companies throw banquets for staff and customers. But in his first year in office, President Xi Jinping has ushered in a new style of austerity, ordering officials to cut back waste.
Some had expected that this belt-tightening would wane after a while, but instead it has intensified. Even private companies pared back their party plans at the end of 2013 and that trend is continuing in the run-up to China’s lunar new year, which begins at the end of January.