Interest Rates

Defusing time bombs

The banking regulator shows a willingness to defuse one of China's biggest financial time bombs but appears likely to keep tiptoeing around another.

May CPI to exceed 3%

China's consumer price index for May is expected to rise 3.1% from a year earlier, according to a Reuters report today, citing three unnamed people who heard government officials state the figure at an investor conference. The inflation figure, should it be confirmed by the statistics bureau tomorrow, supports our call (CC June 03 Big Call) that May CPI will exceed 3% driven chiefly, in our opinion, by rising food price inflation, which accounts for over 30% of the index. We foresee food CPI to jump to around 6.5%-7.5% in May, up from 5.9% in April.

China's inflation outstrips bank deposit rate

China's Consumer Price Index (CPI), the key measure of inflation, rose 2.7% year on year in February, accelerating from a 1.5% rise in January and outstripping the benchmark bank deposit rate of 2.25%. The Producer Price Index (PPI), which measures mainly the prices of production inputs, rose 5.4%, compared to a 4.3% rise in January, underlining the structural nature of inflation.

The course of monetary tightening

How far will Beijing go to forestall economic overheating?

China raises bank reserve ratio by 50bps

China's central bank announced it will raise banks' reserve requirement ratio (RRR) by 50 basis points, effective February 25. This is the second 50 basis point hike since mid January, and brings RRR to 16.5% for large depository institutions. There is "temporarily" no change in the RRR for rural credit co-operatives and other "small financial institutions", the People’s Bank of China (PBoC) said.

January CPI inflation slows

China's Consumer Price Index (CPI), measure of inflation, moderated to a 1.5% rise in January year on year, down from December's 1.9% advance. The Producer Price Index (PPI), which measures mainly the prices of production inputs, was up 4.3% year on year, compared to a 1.7% rise in December. The two new figures reduce pressure on Beijing to tighten monetary policy at an early date but also indicate that the tussle to control inflation is not over.

A bubble, a banking crisis or a soft landing?

Inflation, surging asset prices, overcapacity, hidden local debts, non-performing loans and tightening liquidity. Is this a 'China bubble' about to burst?

Bank shares in 2010

To invest or not to invest in the 14 banks listed on China's A-share market?

Raising the bank reserve requirement

The central bank raised the bank reserve requirement by 0.5 percentage points on January 18. Is this a sign of more tightening to come?

Farmers do better than urban 'mortgage slaves'

This year, Beijing will continue to push preferential policies for farmers while trying to stabilise property prices in major cities.

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29 July

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