Could have been worse…

The Financial Times reports:

"China is to introduce taxes on grain exports in the latest attempt to rein in food-driven inflation that reached an 11-year high in November.

Exporters of 57 types of grain, including wheat, rice, corn and soya beans, will have to pay temporary taxes of between 5 and 25 per cent, the country’s Ministry of Finance said on Sunday."

This is basically a reverse tariff to keep food inside the border. This obviously makes it more profitable to sell their grains domestically.

I guess it could have been worse we could be looking at price controls, which would cause many people to starve.

Still isn’t good because it is going to force businesses to go against market forces…

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Published in: on December 31, 2007 at 5:19 am  Leave a Comment  

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