Inflation

China’s inflation suggests more liquidity easing

Inflation figures released today extend Beijing's license to ease liquidity policy further in coming weeks (CC Jan 12 Macro View) and further relieves manufacturers from the big margin squeeze that characterised 2011 (CC Jan 12 Consumer China).

PBoC surveys show exporter sentiment, inflationary pressure continue to weaken

Two sets of survey data released by China's central bank on Thursday show business sentiment among China's entrepreneurs continues to weaken. Of 5,000 companies surveyed by the People's Bank of China (PBoC), 24.8% believe China's economic status to be 'relatively cool' while the percentage of those believing that conditions are still normal slipped to 67.1% from 74.3% in the first quarter. A separate index of company owners' views of economic conditions for the fourth quarter declined 6pp QoQ to 41.7.

October loans surge, officials embrace private lending

Key cyclical and structural changes are underway in China's financial system. New loans from the formal banking system surged in October, confirming Beijing's looser liquidity policy (CC Sept 8 Macro View). Credit extended from the shadow banks, however, slipped appreciably during the month, according to a China Confidential survey, and we think they will remain subdued in November. Finally, officials are giving their blessing to state-sanctioned private lenders – as distinct from unregistered underground banks – in what promises to be an important liberalisation of state financial control.

China cardholders enjoy buoyant October spending

China's Bankcard Consumer Confidence Index, a measure of cardholder spending on non-essential items, continued to recover, up 0.29 percentage points from September to 86.63 in October and the highest level in terms of index figure and quarterly growth in the last six months, China UnionPay, which compiles the index, said.

Inflation ebbs, significant liquidity easing seen

Inflationary pressures eased in October, with the Consumer Price Index (CPI) showing a 5.5% YoY increase, down from a 6.1% YoY rise in September and the Producer Price Index (PPI) posting a 5% YoY rise against a 6.5% YoY increase in September. The numbers are in line with expectations (CC Nov 3 Macro View) and reinforce our call that significant liquidity easing is likely in the coming few months.

China's inflation cools YoY and MoM in August

Pork prices ease, driving down CPI

Inflationary pressures remain strong

Though a moderation in CPI is likely in September, October and November, underlying inflationary pressures remain strong.

Will the recent rate hike tame inflation?

Commentators discuss the Central Bank’s monetary policy stance in 2H11.

When will inflation start to abate?

Commentators discuss the fate of inflation which hit a 34-month high in May according to official figures.

Inflection point seen in monetary policy

The heavy reliance of the central bank on hiking bank required reserve ratios may be in its final phase, setting up new gambits from the PBoC's playbook.

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09 Feb 2012

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