The Chinese government is terrified of rising food prices. They did, after all, help spark the Tiananmen Square Riots.

And now they've arrived. According to Shangahai Daily, an index of 18 Chinese staple vegetables rose by 6.1% from August 22nd to August 28th -- lettuce rose 18.1%, eggplant 14.1%.

In that same week, pork continued its rise, inflating 0.3%, while rice (0.3%) and flour (0.4%) followed in suit.

So what does it all mean?

The Chinese government's tightening measures aren't working on food prices. Not only that, but they're digging into the pockets of average Chinese people by making it harder for them, and private businesses to get loans. Meanwhile, the economy is slowing down because of a lack of demand in the U.S. and E.U.

In short, for the average Chinese person, cash is tight right now.

The Chinese government knows this because it's a symptom of something they addressed in their latest Five Year Plan -- the need for economic rebalancing from an investment economy to a consumer driven economy. To make that happen, they need to spread wealth more evenly throughout society, and give average people more purchasing power.

Right now, the country coddles state-owned enterprises and party members and chokes regular citizens (just look at who gets what interest rates when borrowing). But taking from one to give to another is painful. One way to do this is to raise wages, which causes inflation of its own.

The current Chinese government is on its way out -- China's Vice-President Xi Jingping should take over for President Hu Jintao in 2013. They're lame ducks and it shows. The men in power are simply putting a band-aid on their "re-balancing" problem (by raising interest rates, for example) and leaving the heavy lifting to the next government.

But by then it could be too late. The people may already be fed up.

And in case you were wondering, China isn't the only one with this problem. Check out India's food inflation here>>