China Has Started Blaming Speculators, Handing Out Fines For Inflation

Following in the footsteps of George Papandreou and Dick Fuld, China is blaming its economic problems on speculators.

Beijing announced plans today to crackdown on speculators accused of pushing up food prices. This is in response to a 10% food price rise in October and a consumer price index at its 25-month high.

This seems like an act of desperation, as nothing else is working. But China has a record of arresting people for commodity inflation. Surging iron ore prices were seen as the primary motivation against the arrest of several Rio Tinto executives last spring.

More examples from the Journal:

The NDRC statement said there has been much speculation in China's cotton market in recent weeks, with some unlicensed companies entering the market to buy and hold cotton, the NDRC statement said. China's cotton price has soared, with cotton for September 2011 delivery, the most active cotton contract on the Zhengzhou Commodities Exchange, hitting a record 33,600 yuan ($5,057) per ton Nov. 11, up from 19,000 yuan per ton on Sept. 10. The cotton contract closed at 25,880 yuan Wednesday.

In July, NDRC imposed a fine of one million yuan on a Jilin-based corn trader for price manipulation and spreading misleading price information. But the government's attention isn't limited to food prices.

The NDRC said Tuesday that it will crack down on profiteering from diesel sales following sharp price increases amid domestic shortages. Some independent refineries and fuel wholesale units of state refiners were found to have sold diesel at prices above levels set by the central government, and they will receive heavy fines, the NDRC said.

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