The Chinese economy drinks blood of recession

Chinese economy asks Europe

In brief: China remains almost the only country in the world where rampant mortgage and rises real estate prices.

Inflation and housing prices increase the pressure on monetary authorities, thereby increasing the chances of growth, interest rates and the yuan appreciation, even while maintaining concern for the authorities in China relative to the debt crisis in the euro area. Real estate prices in April rose at a record pace over the past 18 months, and the volume of new loans exceeded most forecasts.

Chinese stock market fell yesterday on concern that the Government increase the cost of borrowing and make greater efforts to cool the housing market. China’s central bank said risks to price stability in its report on May 10. “Rising inflation, higher real estate prices and rising wages indicate the risk of overheating economy”, – said Kevin Lai, an economist at Daiwa Capital Markets in Hong Kong. – “The government still undecided because of the crisis in Europe, but the rate increase is the only way to limit the risks to growth bubble. The growth in property prices by 12,8% in the 70 cities of China was the largest since records began in 2005. Industrial prices rose by 6.8% in April (the largest gain in 19 months), while consumer prices rose by 2,8% against 2,4% in March. Retail sales in April rose by 18,5% compared with April 2009, and the volume of new loans totaled 774 billion yuan (113 billion U.S. dollars).

Anrey Torbinski
2010-05-12 10:39, Economics.

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