Inflation, Employment and Monetary Policy in China
The economic buzz word of this week is inflation. China, the UK, the US, and Canada all will release their January CPI numbers this week.
As widely reported, the severe drought in northern China helped push the food cost in China up by 10.3% in January; inflation in China is up to 4.9%, from 4.6% in December. The weights of components of Chinese CPI are changed in January: the weight of housing increased while the weight of everything else decreased modestly, including food. This change should have limited impacts on CPI since prices of both housing and food costs are rising in China. Even though the latest January narrowing trade surplus has boosted the Chinese stock markets as investors saw a sign of more balanced economy and less money inflow into Chinas economy, the threat of spiking food inflation after the Lunar New Year holidays weighed heavily on the stock
Complete Story
Comments