Chinese inflation being tamed

Chinese inflation being tamed
Runaway price rises in China look like they are moderating quickly, according the official NBS data for July. But the speed of the reversal is worrying some. For a long while, policy makers in China had to cope with rampant growth as well as fast-rising prices. The concern now is that this quicker-than-expected slowing in prices might indicate a sharper-than-expected slowing in economic growth. Separately, the NBS reported that retail sales grew a massive +23% year-on-year to July, in the lead-up to the Olympic Games in Beijing. A 'games-hangover' is a phenomenum often recorded by countries that stage this event. It had been thought China would be too big to suffer. Renewed debate about the pace of appreciation of the Chinese currency is also occuring. The yuan has appreciated +20% since it was released from its fixed peg in July 2005. China is an important export market for New Zealand. It is our fourth largest customer, taking more than 5% of our exports. But that proportion did not grow between 2007 and 2008.

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