Monday, July 18, 2011

Accuracy... a problem here. It would be impossible for an outsider to accurately calculate the inflation rate in China (much less GDP figures). "Real" Real GDP is likely zero or negative, and has been for some time.

BEIJING -- China could raise interest rates in coming months as it keeps monetary policy tight to tame inflation that is running at three-year highs and is still the biggest threat to its economy, a researcher at a government think tank said.
Chen Dongqi, deputy chief at the Academy of Macroeconomics Research, said he expects China’s consumer inflation to quicken to 6.5% in July from June’s three-year peak of 6.4%, before easing to 4.5% by December.

Mr. Chen’s call for more rate rises come at a time when some investors are speculating that a mild slowing in China’s economy, the world’s second biggest, could persuade Beijing to desist from further policy tightening.

“Compared with China’s consumer price index, China’s current interest rates are certainly not reasonable and require further adjustment,” Mr. Chen told Reuters in an interview.

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