China’s Inflation To Stay At 5% Or Above

People’s Daily Online reported that the economist at UBS expects inflation to stay at 5% or more in the second quarter.  There is very little surprise, of course, because money supply growth is still hot, and that’s what caused inflation to stay really high.

This is hardly a news really.  China will likely to continue its course of tightening, and it will be very wrong to assume that tightening cycle is over.  But the more aggressive the government is, the higher the chance it will risk a high landing.

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