What I see is more evidence of an inflation problem in China that they are now trying to blame on something other than themselves to prevent the historical regime change from inflations of the past.

The problem is, of course, the don’t fundamentally understand how a currency works, which reduces the odds of being able to reverse their inflation without a recession.

Beijing’s Focus on Food Prices Ignores Broader Inflation Risk

By Keith Bradsher

November 17 (NYT) — Zhou Xiaochuan, the governor of the central bank, had said earlier on Tuesday that the amount of money racing through the global economy was putting pressure on emerging economies that want to control inflation. And Yao Jian, a commerce ministry spokesman, said at a press conference on Tuesday that the government would tighten scrutiny of foreign investment so as to prevent too much money from pouring into China as foreign investors seek higher returns than are currently available in the West.

Imposing price controls and other administrative controls on the Chinese economy runs counter to the steps recommended by many Western experts. They have suggested that China should further deregulate its economy, let the renminbi appreciate and otherwise rely on market forces to tame inflation.