A blog on Chinese economy & society

Inflation data out

with one comment

And they don’t look good.

April CPI was up 2.8% YOY (consensus at 2.7%), dangerously close to the 3% threshold set by the government. PPI up 6.8% YOY (vs. 6.7% forecast). The banks made RMB774bn new loans in April, a hefty 52% increase over March.

The plan was to tranquilize Chinese economy with policy measures and wait for the global liquidity tide to ebb. Well, this ain’t gonna happen. If anything, there’s more free money  now than ever.

Maybe it’s time to bite the bullet and hike interest rate. Either that, or people will soon start demonstrating ’cause they can’t afford vegetables.  The Tiananmen protest in 1989 started out as demonstration against raging inflation after all.


Written by Cindy Luk

May 11, 2010 at 4:39 am

One Response

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  1. Thanks for pointing out the real underlying cause of the the events leading up to summer of ’89. Since a number of ‘private’ mainland developers are grabbing all that ‘free cash’ from HK & elsewhere outside of the PBoC jurisdiction (via HK bank loans, high yield debt, etc.), it looks like the even with local rate hikes & public policy clampdowns won’t work perfectly now.


    May 12, 2010 at 1:40 am

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