The Inflation Bear is Trouble for China

China should be aware of , economist Jun Ma suggests. From Time The China Blog:

Jun Ma of Deutsche Bank, one of the better China economists in Hong Kong, has just published his latest forecast, which includes inflation going to eight per cent year over year in March. That’s a big number and if true could mean serious trouble for the government. It means nothing it’s done thus far has even remotely succeeded in cooling off the economy and mounting inflation expectations. Further interest rate increases , of course, a given. But what about faster revaluation of the RMB? A stronger RMB would hurt the export sector and reduce import prices. Pay attention to this one, it could really bite the government in this the year of their Olympic glory...

Here’s Jun’s summary of his latest forecast.

See also CNN's report: Hong Kong shares close lower on China inflation worries - UPDATE and Reuters' China's inflation hits 11-year peak, headed higher

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