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China’s Inflation Heats Up, Most in 2 Years
Thursday, April 26, 2007
China's economy surged at an 11.1 percent annual rate in the first quarter — the most in more than two years — causing the country's Cabinet to announce it will take steps to keep the economy from overheating, sources reported.
A spokesman for the National Bureau of Statistics stated that, "If this type of fast growth continues, there is the possibility of shifting from fast growth to overheating. That is the risk."
China's consumer price index in March reportedly rose at a 3.3 percent annual rate, above the government's 3 percent target. That's the country's highest CPI since hitting 3.9 percent in February 2005.
A statement posted on the State Council's Web site said the government will work to "reduce the country's large trade surplus, limit rapid growth in house prices and maintain basic price stability."
Beijing has already raised interest rates three times in the past years, news sources reports. The country has also imposed investment curbs on real estate, the auto industry and other market segments.
Inflation in the first quarter hit a 2.7 percent annual rate, up 1.5 points compared with the same period last year.
China has reportedly said it wants to keep inflation under 3 percent for the entire year after it increased 1.5 percent in 2006.
A Hong Kong-based analyst stated that, "The stronger-than-expected data suggest that the government will likely introduce another round of tightening measures very soon which, on top of a rate hike, may include further hikes in the reserve requirement ratio" and other measures to cool investments.
According to one news source, investors in China and around the region are concerned that steps to restrain investment would hurt business prospects.
Last year, the U.S. reported a record $232.5 billion trade deficit with China.
A spokesman for the National Bureau of Statistics stated that, "If this type of fast growth continues, there is the possibility of shifting from fast growth to overheating. That is the risk."
China's consumer price index in March reportedly rose at a 3.3 percent annual rate, above the government's 3 percent target. That's the country's highest CPI since hitting 3.9 percent in February 2005.
A statement posted on the State Council's Web site said the government will work to "reduce the country's large trade surplus, limit rapid growth in house prices and maintain basic price stability."
Beijing has already raised interest rates three times in the past years, news sources reports. The country has also imposed investment curbs on real estate, the auto industry and other market segments.
Inflation in the first quarter hit a 2.7 percent annual rate, up 1.5 points compared with the same period last year.
China has reportedly said it wants to keep inflation under 3 percent for the entire year after it increased 1.5 percent in 2006.
A Hong Kong-based analyst stated that, "The stronger-than-expected data suggest that the government will likely introduce another round of tightening measures very soon which, on top of a rate hike, may include further hikes in the reserve requirement ratio" and other measures to cool investments.
According to one news source, investors in China and around the region are concerned that steps to restrain investment would hurt business prospects.
Last year, the U.S. reported a record $232.5 billion trade deficit with China.
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Investment in equity shares has its own risks. Sincere efforts have been made to present the right investment perspective.The information contained herein is based on analysis and up on sources that we consider reliable. I, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and I am not responsible for any loss incurred based upon it.& take no responsibility whatsoever for any financial profits or loss which may arise from the recommendations given in this blog.
