McDonald’s Corp, the world’s largest restaurant chain, increased prices for its burgers, drinks and snacks in China yesterday to offset costs after the country’s inflation surged to a two-year high.
Product prices were raised between 0.5 yuan and 1 yuan (US$0.08 and US$0.15) because of higher raw material costs, Sophia Luan (欒江紅), China spokeswoman for the Oak Brook, Illinois-based company, said in a telephone interview. She declined to provide an average percentage increase.
China has the world’s cheapest Big Macs partly because of a weak yuan, according to The Economist Big Mac Index as of Oct. 14. The sandwiches cost US$2.18 each on average in Beijing and Shenzhen, compared with US$3.71 in the US.
Photo: Reuters
Big Macs are most expensive in Switzerland at US$6.78, according to the magazine’s index, which uses the concept of purchasing power parity that states the dollar should buy the same amount in all countries.
Meanwhile, China’s Cabinet is drafting measures to counter excessive price increases, Chinese Premier Wen Jiabao (溫家寶) told state television on Tuesday. In comments posted late Tuesday on the government’s Web site, Wen said: “Great attention should be paid to market supply and demand and prices because they are related to the public’s basic interests.”
“The State Council is formulating measures to curb the overly fast rises of prices,” he said, giving no details.
Wen made the comments during a visit to a supermarket last Thursday in Guangzhou.
He spoke after data last week showed the nation’s consumer price index rose 4.4 percent year-on-year last month, much higher than the government’s full-year target of 3 percent. It was the fastest since September 2008, after which the global financial crisis slowed down price rises.
A Chinese consumer confidence index fell in the three months ended September, the first decline in six quarters, on expectations the costs of goods and services will keep rising.
A total of 76 percent of consumers expect prices will increase further over the next year, up from 70 percent the previous quarter, according to a statement from Nielsen Co and the Chinese statistics bureau’s Economic Monitoring and Analysis Center yesterday. Concerns about inflation are strongest among rural and first-tier city consumers, the survey said.
“If consumers see justifications for price increases, such as value and product safety, they will be willing to pay for it,” Vinay Dixit, senior director of Asia consumer centers at McKinsey & Co, said in an interview in Shanghai.
China may impose price limits on food and toughen punishment of those found speculating on agriculture futures including corn and cotton, the China Securities Journal reported, citing an unidentified person.
The Shanghai Composite Index, which tracks the bigger of China’s stock exchanges, dropped 55.68, or 1.9 percent, to 2,838.86 at the 3pm close, the lowest level in a month. The gauge has lost 10 percent since reaching an almost seven-month high on Nov. 8 as investors speculated the government will raise rates for the second time in a month and institute price controls to combat the fastest inflation in two years. The CSI 300 Index retreated 2.1 percent to 3,103.91 yesterday.
Hon Hai Precision Industry Co (鴻海精密) yesterday said that its research institute has launched its first advanced artificial intelligence (AI) large language model (LLM) using traditional Chinese, with technology assistance from Nvidia Corp. Hon Hai, also known as Foxconn Technology Group (富士康科技集團), said the LLM, FoxBrain, is expected to improve its data analysis capabilities for smart manufacturing, and electric vehicle and smart city development. An LLM is a type of AI trained on vast amounts of text data and uses deep learning techniques, particularly neural networks, to process and generate language. They are essential for building and improving AI-powered servers. Nvidia provided assistance
DOMESTIC SUPPLY: The probe comes as Donald Trump has called for the repeal of the US$52.7 billion CHIPS and Science Act, which the US Congress passed in 2022 The Office of the US Trade Representative is to hold a hearing tomorrow into older Chinese-made “legacy” semiconductors that could heap more US tariffs on chips from China that power everyday goods from cars to washing machines to telecoms equipment. The probe, which began during former US president Joe Biden’s tenure in December last year, aims to protect US and other semiconductor producers from China’s massive state-driven buildup of domestic chip supply. A 50 percent US tariff on Chinese semiconductors began on Jan. 1. Legacy chips use older manufacturing processes introduced more than a decade ago and are often far simpler than
STILL HOPEFUL: Delayed payment of NT$5.35 billion from an Indian server client sent its earnings plunging last year, but the firm expects a gradual pickup ahead Asustek Computer Inc (華碩), the world’s No. 5 PC vendor, yesterday reported an 87 percent slump in net profit for last year, dragged by a massive overdue payment from an Indian cloud service provider. The Indian customer has delayed payment totaling NT$5.35 billion (US$162.7 million), Asustek chief financial officer Nick Wu (吳長榮) told an online earnings conference. Asustek shipped servers to India between April and June last year. The customer told Asustek that it is launching multiple fundraising projects and expected to repay the debt in the short term, Wu said. The Indian customer accounted for less than 10 percent to Asustek’s
Gasoline and diesel prices this week are to decrease NT$0.5 and NT$1 per liter respectively as international crude prices continued to fall last week, CPC Corp, Taiwan (CPC, 台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. Effective today, gasoline prices at CPC and Formosa stations are to decrease to NT$29.2, NT$30.7 and NT$32.7 per liter for 92, 95 and 98-octane unleaded gasoline respectively, while premium diesel is to cost NT$27.9 per liter at CPC stations and NT$27.7 at Formosa pumps, the companies said in separate statements. Global crude oil prices dropped last week after the eight OPEC+ members said they would
RSS