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Despite New Year celebration, China's January inflation remained steady at 2.5%

Saturday, February 15th 2014 - 05:54 UTC
Full article 34 comments
Food prices climbed 3.7% during the first month of the year Food prices climbed 3.7% during the first month of the year

China's inflation rate remained subdued in January, despite rising food prices during the New Year celebrations. Consumer prices held steady at 2.5% from a year earlier, which was slightly higher than many economists expected.

 The National Bureau of Statistics said there was a 3.7% rise in food prices during the month, which included both the Western and Chinese New Year celebrations.

Meanwhile, factory gate prices fell 1.6%, marking the 23rd consecutive monthly decline.

“Inflation is not going to be an issue in China this year,” said ING economist Tim Condon.

The latest price figures leave room for the Chinese government to stimulate the economy if growth drops too low.

Beijing has been looking to wean the world's second-largest economy off its dependence on exports and become more consumer-oriented.

By keeping price pressures low, the government is able to focus on promised reforms to make the economy more productive and keeping incomes rising.

China's inflation has slowed markedly since 2011, when the annual consumer price index spiked to 5.4%.

Categories: Economy, Politics, International.

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  • ChrisR

    “Inflation is not going to be an issue in China this year,” said ING economist Tim Condon.”

    “ING economist” is an oxymoron, just like military intelligence.

    We had a great deal of money with ING and were bloody lucky to get it out before the shit hit the fan.

    Couldn’t tell their arses from their elbows as far as I am concerned.

    I will be monitoring the inflation numbers coming from ChINDEC against the reality of:

    1) the population are malnourished and there is a dire lack of food BUT there are no price rises in food, why?

    2) China claims they will overtake the US as the greatest GDP this year; we will see;

    3) How many riots occur (that we learn of) once the industrial might turns downward.

    Feb 15th, 2014 - 03:14 pm 0
  • CabezaDura2

    Jim Rogers on China's ascension, Wall Street's downfall and Obama's failures

    http://www.youtube.com/watch?v=5RrIhdNnBdE

    Feb 17th, 2014 - 03:09 am 0
  • ChrisR

    From the Daily Telegraph:

    http://www.telegraph.co.uk/finance/commodities/10642184/Gold-price-signals-China-credit-bubble-bursting-as-investors-seek-safety.html

    “Ash argues that capital flight is happening at a rapid rate in China because of the $1.8 trillion of funds that have flooded into unregulated, non-bank “wealth management products” which offered very high yields, up to 17 times as much as cash deposits. It is feared that many of these funds are now trading at a loss, setting up a crunch moment for China’s economy.

    “Bullion traders never knew before what would happen to prices if China hit trouble,” said Ash, “because we’ve never before seen Chinese demand plumbed into the world market so deeply. Its jewellery buyers, together with rising mining costs worldwide, helped finally put a floor under gold in 2013. But while that kind of consumer demand will never drive prices higher, capital flight by wealthier households and Chinese money managers certainly can.”

    According to Ash, the first default which could be a sign of China’s credit bubble bursting was reported two weeks ago when a $50m coal-mining bond failed to repay investors on maturity. He says that about $875bn of other such products are due to mature in 2014 and that Beijing has few answers available to tackle the problem.”

    HOWEVER:

    “Other brokers have said that the rise in gold prices last week above the commodity’s 200-day moving average was mainly because of the fall in the dollar against a basket of other currencies. Commerzbank said that SPDR Gold Trust, the world’s largest gold exchange-traded fund, raised its holdings above 800 tonnes of the precious metal for the first time.

    According to Gold Money, bulls also returned to the market after Janet Yellen signaled that the US Federal Reserve will continue to prune back its stimulus measures. “Western buyers and vaults are now back in the frame amid the more bullish market sentiment,” said Roland Khounlivong, head of dealing for the broker.”

    Feb 17th, 2014 - 10:16 am 0
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