China Needs to Control Liquidity To Curb Inflation – WSJ

From The Wall Street Journal:

Senior Chinese government officials Tuesday stressed the need to control the country’s massive liquidity or risk higher inflation, amid expectations that export growth momentum will retain this year’s torrid pace.

Tried-and-tested steps such as open market operations to soak up excess liquidity will continue to be used, and the central bank is also mulling the creation of an investment vehicle, possibly modeled after Singapore’s Temasek Holdings Pte. Ltd. to deal with the country’s huge foreign reserves, they said.

According to officials who attended a People’s Bank of China financial forum, China’s will likely have some room to rise next year but will still be at an acceptable level.[Full Text]

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