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BEIJING—China's consumer prices rose the fastest in nearly two years in August and industrial-output growth rebounded, but the pickup doesn't look set to prompt Beijing to raise interest rates or drive the yuan higher.
The consumer price index rose 3.5% from a year earlier on a jump in food prices, accelerating from July's 3.3% increase for the biggest gain since October 2008, data showed Saturday. The August rise matched the median 3.5% increase forecast in a Dow Jones Newswires survey.
The markets will be watching Beijing this week as it release inflation and industrial output data. Meanwhile the DPJ leadership race is down to the wire in Japan. MarketWatch's Chris Oliver reports.
But despite the pickup in inflation, reported by the National Bureau of Statistics, economists expect price rises will ease in the coming months as food prices were temporarily boosted by flooding and other adverse weather. Food prices were the main contributor to inflation, rising 7.5% from a year earlier while nonfood prices rose just 1.5%.
Markets are on the lookout for the People's Bank of China to push the yuan sharply higher or raise interest rates to curb inflation, but economists saw little need for such tightening in Saturday's data.
An adviser to the central bank appeared to suggest as much.
Xia Bin told Dow Jones the economic situation doesn't justify any sharp policy changes. The government should fine-tune macroeconomic policy but "won't and shouldn't" change the basic policy direction, he said.
As for the currency, Mr. Xia said China aims to let the yuan move more freely in line with economic needs but that this a long-term goal. He added that it's up to the PBOC decide how to implement the country's exchange-rate reform.
Some economists said there are signs that macroeconomic policy is in fact being loosened.
"It is an increase in pork production, rather than a hike in interest rates, that is required to deal with China's current bout of price pressure," Tom Orlik, an analyst at research firm Stone & McCarthy, said in a research note.
Industrial production rose 13.9%, up from 13.4% in July, and well above expectations for a 12.9% rise, which would have continued a slowing trend in recent months.
Output has now "stabilized" with the growth rebound, the first uptick in the growth rate this year, said statistics bureau spokesman Sheng Laiyun. "We think this is a good phenomenon."
Goldman Sachs economist Yu Song called the output bounce "very strong. I believe it must be policy-related."
The gain is probably due, at least in part, to a speedup in the approval of infrastructure investments since mid-July, while an acceleration in money-supply growth similarly indicates "an effective loosening of monetary policy in July and August," Mr. Yu said.
China's broadest measure of money supply, M2, jumped 19.2% at the end of August from a year earlier, up from 17.6% at the end of July, the People's Bank of China said Saturday. The increase was well above forecasts that money supply growth would be flat from July.
The PBOC let the yuan jump Friday, setting its reference rate at the strongest level against the dollar since the central bank began publishing the daily fixing in 1994. This was interpreted by many observers as an attempt by China to cope with growing momentum in Washington to adopt punitive legislation against Beijing.
The move capped a significant rise--by the tame standards of the yuan's tightly controlled trading--over the past week, but it still leaves the Chinese currency just 0.8% stronger against the dollar than it was June 19, when Beijing ended the currency's two-year peg to the dollar.
Economists said Saturday's data don't show a great need for yuan appreciation.
A rapid, "one-way" rise isn't consistent with China's stated goal of having "two-way" flexibility in the exchange rate, said Galaxy Securities chief economist Zuo Xiaolei. "The yuan will undergo a fluctuating upward trend in the future, but the pace of appreciation won't be too great. We expect the yuan to rise by 2-3% by the end of the year."
Financial institutions in China extended 545.2 billion yuan ($80.53 billion) in new loans in August, up from 523.8 billion yuan in July and above expectations for 500 billion yuan.
Urban fixed-asset investment rose 24.8% in the January-August period from a year earlier, slowing slightly from the January-July 24.9% increase. Economists had expected urban FAI to rise 24.5% in the January-August period.
China doesn't issue monthly data for urban FAI.
Retail sales rose 18.4% in August from a year earlier, picking up from July's 17.9% increase.
The producer price index, a gauge of factory-gate prices, rose 4.3% in August from a year earlier, slower than July's 4.8% rise and below the median 4.5% rise forecast by economists. |
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发表于 2010-9-11 08:08 AM
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