We have now figures of China s economy growth. Total growth for 2009 is 8.7%, far above 8% goal. In the last quarter growth was a impressive 10.7%.
http://www.youtube.com/watch?v=TfP0R7G1oGQ It is good news, of course, however it means new challenges ahead such as reshape of our economic structructure as Mr. Ma points out. Also, and more important in the short term, is what we have talked since long ago in this board: inflation risks, as prof. Huo tells in this interview. http://www.youtube.com/watch?v=LHg4H3GCQ3M We have talked about the gap between PPI (production price index) and CPI (consumer price index) that has been about 4% along months. Peoples Bank of China governor Mr. Zhou told inmediately that the PBOC will use a "flexible" monetary policy. What mean that according to circumstances financial policies might tighten as prof. Huo suggested. Higher interest rates, higher required reserve rates, etc. Also economic and fiscal policies will be more "flexible" as he told. Also, in my opinion, it might incude Yuan apreciation around March or April, after Peoples Congress. http://english.cctv.com/program/chinatoday/20100122/101292.shtml Also, as premier Wen told, we have to focuss on existing projects and not launching new ones yet, keeping those new projects just as amunition for a potential double dip. At this point nobody doubts that China is recovered and will start to put more exit policies in place inmediately and within the first half of this year. However we must be extremely cautious. Global recovery is not robust yet. Most developed economies are still into crisis, risks of a second dip in some of them is very high, that would slow down growth in China again. In a second message I will focuss on the risk of high inflation or even hyperinflation in economies that are behind in the curve, mostly those economies in the West that cannot take advantage of Chinese growth easily. -- You received this message because you are subscribed to the Google Groups "World-thread" group. To post to this group, send email to [email protected]. To unsubscribe from this group, send email to [email protected]. For more options, visit this group at http://groups.google.com/group/world-thread?hl=en.
