China is losing its fight against inflation

Reuters reports that a senior Chinese government economist has warned that China will not meet its 3% inflation target. He suggests a 5% target instead. See “China inflation target may be out of reach: economist.”

It is also interesting to read that China feels constrained by the monetary policies of its trading partners:

“Ba Shusong, another senior researcher at the DRC, said the central bank would likely be cautious in raising interest rates, preferring instead to use quantitative tools, such as open market operations and required reserves, to manage liquidity.

“The ultra-low interest rate policy stance adopted by the United States and some other countries actually give China very limited scope to raise interest rates,” Ba told the forum.”


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