Saturday 8 May 2010


SLOW CHINA GROWTH TO AVOID OVERHEATING, SAYS CABINET RESEARCHER

Bloomberg, May 8, 2010

China needs to slow economic growth to below 10 percent to avoid overheating and contain inflation, a cabinet researcher said.

“China’s economic growth may slow later this year, which is necessary to avoid overheating,” Liu Shijin, deputy director of the State Council’s Development and Research Center, said at a financial forum in Beijing today. “While the government takes steps to damp asset prices, we should also closely monitor inflation” after record bank lending last year, Liu said.

China’s statistics bureau may next week report an acceleration in producer price gains and consumer inflation, underscoring a risk of overheating even after Premier Wen Jiabao unleashed what economists called “draconian” measures to crack down on property speculation and raised banks’ reserve requirements for a third time this year to rein in liquidity.

Wen’s campaign to cool real estate prices may damp expansion of the world’s third-largest economy as the Greek debt crisis threatens to undermine export demand, exacerbating any slowdown. Concerns that the European contagion may spread led Asian stocks to tumble yesterday after U.S. equities plunged the most in a year the previous day.

China now faces an “even more complex” environment as the debt crisis adds uncertainty to the global recovery and excessive liquidity in China pushes up asset prices, Liu said.

“Where is the ultra-loose monetary policy going? That is like the other shoe that has yet to drop,” said Liu, whose agency advises China’s top policy makers.

(...) [artículo aquí]

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