Tuesday, February 20, 2018

Inflation in China? Depends on Who You Believe

March 18, 2010 by  
Filed under Inflation or Deflation

For the remainder of this year, inflation in China is expected to be “mild and controllable”, according to a statement made bv Fang Aiqing, assistant commerce minister. He made these remarks at a press conference on March 13, 2010.

Mr. Aiqing’s remarks would contradict the January 23, 2010 assessment of Tao Dong, chief Asia-Pacific economist at Credit Suisse AG. Mr. Dong predicted that China’s inflation rate could go as high as 5% this year, citing how the government’s efforts to “cool lending will have little effect”.

A Bloomberg report on March 16, 2010 lends support to Mr. Dong’s argument. According to Bloomberg, after reporting full year deflation in 2009, China experienced an annualized inflation rate of 2.7% in February of 2010.

On March 18, Reuters reported “renewed fears of credit tightening by Beijing after regulators asked banks to control the pace of lending.”

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