1. Inflation zone
tl indications are that trillion yuan in November, but 5
the Chinese economy percentage Points lower than that
has rapidlymanagedto of a vear earlier.
sidestep deflation with The first monthlY rise in the CPI
a 0.6-percent Year-on- since IanuarY certainlY comes as
vear increase in consumer Prtces a relief to policYmakers who have
iecorded last month. The inch uP been working hard to Prevent
comes amid a gradual V-shaPed deflationary forces from taking
recovery from the worst global root.
The return of inflation, however
t{
recession in decades.
In February, China registered its
first dip in six Years in the con-
mild, requires that PolicYmakers
be as vigilant as Possible.
sumer price index (CPI)' Soon, The low-growth ProsPects of the
{ there was skePticism whether world economY mean international
the country would achieve the inflationary Pressure maY remain
( B-percent growth target for the subdued for a while.
uj vear. So, even if it temPts some debt-
q ' With yesterdaY's economic laden countries to "inflate" their
numbers reflecting way out of the cri-
$ sis, the domestic
accelerated growth,
t"L)
few will entertain situation is just
d And, it is believed not the same.
any such doubt.
lir China's GDP has Food prices,
that the combination
A increased from of a 9.8-Percent
which make uP
6.1 percent in the for a third of the
t
-J
first quarter of the
Year - the slowest
in near$ a decade
-
increase in trade
ending a 12-month
CPI basket, rose
3.2 percent in
November from
decline -
and strong a year earlier.
t
A
- Io 7.9 Percent
in the second and retailsales and fixed- The higher rates
are already im-
8.9 percent in the asset investment
third. pacting Chinese
q And, itis believed
seen last month will households, and
that the combina- ensure double-digit there is little sign
? tion of a 9.8-Per- growth in the fourth the increase will
cent increase in be capped anY
quarter.
!. tradd - ending a time soon.
12-month decline Planned price
hikes for energy
- and strong retail and utilities maY be necessarY to
sales and fixed-asset investment
l seen last month will ensure promote energy conservation and
I double-digit growth in the fourth
quarter.
sustainable develoPment - but
they will sustain inflationarY
pressure next Year'
The countrY's imPorts and
exports rose 9.8 Percent in No- Yet, the bigger threat is from
veinber year on Year to stand the ongoing credit boom, which
at $208.2 billion. And the trade has the potential to fuel asset
surplus was $177.96 billion in the bubbles. This will dramaticallY
Jan-Novperiod, down 30.6 Percent increase the rate of inflation.
from a year earlier. The new Yuan-denominated
The urban flxed-asset invest- lending in November rebounded
ment rose 32.1 Percent Year on slightlyto 294.8 billionyuan from
vear in the first 11 months to October's 253 billion Yuan'
iO.aO ttittion yuan ($2'47 tril- It is riskY for China to start
lion), or 5.3 Percentage Points tightening PolicY too soon, given
hieher than the Year earlier. thl uncertain global economY. Yet,
Meanwhile, the retail sales rose the inflation trigger allows for no
15.8 percent Year on Year to 1'13 slow response.