CHINA AND GLOBAL REBALANCING

ANALYSIS: CHINA'S TIGHTENING SHOWS GLOBAL REBALANCING AT WORK

Alan Wheatley

Reuters, February 9, 2010

The inflationary pressures that prompted China to raise interest rates for the third time in four months are evidence that the imbalances destabilizing the global economy are slowly but surely being ironed out.

China's current account surplus, though shrinking, will not melt away overnight. Finance ministers from the Group of 20 major economies who are meeting next week are still likely to urge China to let the yuan's nominal exchange rate rise faster.

"This broader story of rising inflation in China contributes to global rebalancing," said Ashley Davies, an economist with Commerzbank in Singapore. "China is getting more expensive relative to the West."

(...) [artículo aquí]