The recent National Peoples’ Congress in Beijing made it clear that price stability, rather than growth, had become the top priority in China.

The consumer price index target was set at 4 per cent (a percentage point above last year’s missed 3 per cent target). So far this year, though, the government hasn’t been any more successful than in 2010. Food prices continue to rise (though at a slower pace after the Lunar New Year banquets came to an end in mid-February). Housing prices also are going up despite measures to curb the appreciation. And the prices of commodities that China imports such as oil and coal continue to climb, up 30 per cent in the past three months.

The market frets about all this. It also frets about rising wage bills in China – wages were up in nominal terms 14 per cent on the year through September, according to HSBC.