Inflation tops Chinese officials' worries: survey

By Chris Buckley

BEIJING (Reuters) - China's surging price rises have leapt to the top of leading officials' worries, according to a survey that showed inflation overtaking corruption and inequality as the country's number one social problem.

The findings issued on Wednesday came from an annual survey of 154 officials studying at the ruling Communist Party's Central Party School, where aspiring leaders are trained.

They also coincide with a meeting near Beijing on Wednesday at which U.S. Treasury Secretary Henry Paulson told Chinese officials they needed a more flexible currency to tame inflation risks.

Asked in October to list the biggest social problems this year, 30.5 percent of the officials chose prices, followed by income inequality (23.4 percent) and corruption (13.0).

The disquiet about prices comes as the country experiences its highest inflation for over a decade, with anxious citizens paying much more than they did a year ago for meat, food oil and other staples.

In recent official meetings and meet-the-people visits, top leaders have shown that they fear the rises could undercut rising living standards and stir social discontent.

"This year the price issue has for the first time become the most serious social problem," commented Chinese Cadres Tribune, the Communist Party school magazine that issued the survey results.

"On this point, the views of leading officials are also quite consistent with ordinary people's."

China's annual consumer price inflation hit an 11-year high in November, with worrisome signs that price pressures are spilling over from the dinner table to the broader economy, data issued on Tuesday showed.

The consumer price index rose 6.9 percent from a year earlier. Food cost 18.2 percent more than a year earlier.

The survey report said that in 2005, only 2.1 percent of respondents nominated price worries among their top four concerns, compared to 75.6 percent who listed income inequality and 40.2 percent who listed corruption.

This year, 64.9 percent listed income inequality as among their top four worries, compared to 51.9 percent for corruption and 42.1 percent for prices.

China has seen popular unrest over inflation help topple other developing countries' governments, and inflation fuelled the discontent that culminated in the bloody crackdown near Tiananmen Square in 1989.

Last month, three people died and 31 were injured in a stampede at a store in southwestern China as shoppers scrambled for discount cooking oil.

The government said last week that its two main economic policy goals for 2008 were to prevent the economy from overheating and to keep food price inflation from spreading to other sectors.

(Editing by Nick Macfie)