What do you do when inflation is soaring and new taxes are on the way? The answer for thousands of Chinese: Buy now!
Stores were packed Saturday with eager shoppers hoping to pick up imported electronics and other items before prices jump again.At the Blue Island department store, one customer walked away with a 29-inch Panasonic color television for $2,275 and another picked out a 21-inch model for $770.
"I'm afraid the price will go up next year," the second shopper explained.
Such fears have increased since the government this month announced details of planned tax reforms.
Consumers making a run on televisions and other electronic goods seem particularly worried about a consumption tax that takes effect Jan. 1, even though the tax applies only to alcohol, tobacco, jewelry, cars and a few other items - not appliances.
The electronics buying binge has made inflation fears a self-fulfilling prophecy: Demand for such imports has soared, and prices have gone up an average of about 7 percent, the Beijing Daily said. Prices on some popular Japanese brands, such as Matsushita and Sony, have risen more than 10 percent.
Even before this month's price increases, it was clear that a government clampdown on credit had failed to bring down urban inflation running at an annual rate of more than 20 percent.
Officials took emergency action this month to bring down sharp price increases for food, sparked in part by rumors of shortages.