Inflation remains main risk for China's economy: U.S. economists   2011-04-11 16:58:23 FeedbackPrintRSS

BOSTON, April 10 (Xinhua) -- Inflation remains the main risk for China's economy this year, U.S. economists said at the Harvard China Forum here on Sunday.

Fred Hu, economist and chairman of Primavera Capital Group, said inflation remains the main threat to the Chinese economy and that China's monetary policy still has to be biased toward tightening.

Hu attributed the cause of China's inflationary pressure mainly to the massive liquidity stimulus introduced after the global financial crisis in 2009 and also to rising commodity prices.

Ronald McKinnon, professor of international economics at Stanford University, told Xinhua that the price surge for such commodities as oil, copper and iron is a consequence of the zero interest rate policy adopted by mature economies as the United States and Britain.

McKinnon said these countries' policy of keeping their interest rates too low is creating hot money inflows into emerging markets including China, causing greater inflation pressure there. "It is very bad for the world economy," McKinnon said.

To tackle rising inflation in China, Hu said China's central bank should continue to tighten its monetary policy as it has done since last autumn.

McKinnon said it would be helpful if the U.S. joined other countries in monetary tightening and raising interest rates.


China's economy to grow 9.6 pct in 2011, inflation remaining threat in Asia

HONG KONG, April 6 (Xinhua) -- China's economy is expected to grow 9.6 percent in 2011 as inflation remains a threat for the Asia's growth engine as well as other economies in the region, the Asian Development Bank (ADB) said in an annual report released here Wednesday.

With inflation pressures building and tightened monetary policy, China's gross domestic product (GDP) growth was forecast moderate this year, compared with a growth of 10.3 percent in 2010, said the ADB in its 2011 Asian Development Outlook, which expected a growth of 9.2 percent in China in 2012. Full story

How to deal with inflation? Buy gold! Shoppers, retailer and miner say

BEIJING, April 11 (Xinhua) -- As people in China were overwhelmed by anxiety about soaring prices, many residents in the Chinese capital believe they have found a good alternative to hedge against price increases: gold.

"I want to buy some gold to protect my wealth from inflation," Feng Chun, a shopper in her forties said while trying to pick one gold bracelet amid the crowded counter at Caishikou Department Store, the largest gold dealer in downtown Beijing. Full story

China builds "lines of defense" to guard imported inflation: official

TIANJIN, April 7 (Xinhua) -- The Chinese government has built "multiple lines of defense" to guard against imported inflation and will not let it fuel domestic consumer prices, a senior official at the country's top economic planner said Thursday.

To contain rising inflation, Chinese authorities have been working to boost production, ensure supply, improve distribution networks and stabilize prices, Peng Sen, deputy director of the National Development and Reform Commission said on the sideline of a national conference on economic system reform. Full story

China hikes rates against inflation

BEIJING, April 6 (Xinhua) -- The Chinese central bank's move to raise the benchmark interest rate drew diverging views from economists, and set the country's equity markets above a key psychological barrier on Wednesday.

The increases of banks' one-year borrowing and lending rates by 25 basis points take effect beginning Wednesday. The benchmark Shanghai Composite Index rose more than 1.1 percent to close at 3,001.36 points during the day. Full story

Editor: Deng Shasha
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