The World

China, acknowledging that failures in its vaunted economic reform program have made inflation a major problem, reimposed government spending restrictions in a bid to rein in surging prices. The move was announced after the State Bureau of Statistics released a report on the Chinese economy in 1987, citing serious concern over inflation, which some Western diplomats say may have risen by as much as 20% in big cities, and declining food production. The annual report said the nation's economy grew by 9.4%, but rising prices caused by high consumer demand lowered living standards for one out of five city dwellers.

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