Sunday, October 14, 2007

China: Growth vs. Inflation

This, to me, is a greater issue than the declining US dollar, and in some ways, more potentially lethal than oil when it comes to China. Inflation is the silent assassin, the undetectable poison. Can China contain inflation in the face of 11.9% economic growth (year over year)?

I think so. But I do feel cautious.

AFX News: China inflation trending upward; 2007 CPI growth seen at 4.5 pct - think tank

In the eight months to August, the CPI grew 3.9 pct year-on-year, well over the government's 3 pct full-year target.

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