Photo: flickr: jaaron
China’s CPI is expected to reach 6.2% in Q3, up from 5.7% in Q2. At the same time, growth is expected to move more slowly than it has in two years, easing to 9.2% in Q311 from 10.3% in Q310, reports Shanghai Daily.Via Shanghai Daily:
“The inflationary pressure will remain high,” said the State Information centre, a unit under the National Development and Reform Commission. “Soaring prices will curtail economic growth and China has to maintain tightening measures to tame inflation.”
All of this information came from a State Information centre economic report, which also identified some of the causes for this substantial inflation. For one, over the last year, food costs rose by 14.8% and most dramatically, pork prices soared 56.7%.
The government has been moving to increase the supply of pork in the market, but they fear that monetary easing from the United States means that July’s 6.5% inflation rate will not be the year’s peak as they had hoped. And the way Shanghai Daily makes it sound, QE3, if it were to happen, would be a main factor in Chinese inflation… and it’s coming (do they know something we don’t? Because that’s not what it looks like from here right now.)
The US is eying a third round of quantitative easing, or printing money, to repay debt and bolster economic growth but this move may push up prices of commodities globally and increase pressure of imported inflation. It may also trigger an influx of speculative money into China and make it more difficult for the government to curb price rises.