Sunday, December 10, 2006

"China Consumer Prices Rise Most in 20 Months on Food "

"core" rate excluding the 30% foodportion of the basket sound like the fed. add to this that china controll the eneryprices and you wonder why anybody looks at the "inflation" numbers and the all the talk about low inflation etc.

kerninflation die satte 30% des warnekorbes (essen) ausklammert und zudem noch energiepreise die staatlich festgesetzt werden.... warum nimmt ├╝berhaupt einer diese niedrigen "inflationszahlen" ernst.

Dec. 11 (Bloomberg) -- Inflation in China, the world's fastest-growing major economy, accelerated more than expected in November as food costs increased at the quickest pace in almost two years.

Consumer prices rose 1.9 percent from a year earlier, the National Bureau of Statistics said today. That was the biggest gain in 20 months, ....topped all estimates among 21 economists surveyed .....

Chinese stocks and bonds rose as non-food inflation held at 1 percent (the chinese "core"?!/die chinesiche "kerninflation"?!), damping expectations that the central bank will respond by raising interest rates. Central bank Governor Zhou Xiaochuan last month said pressure to add to two lending rate increases since April has lessened. (what a rational..../was ne logik....)

``There's nothing major to worry about,'' ........ It's mostly driven by food prices.''

Food costs, which account for a third of the consumer price index, jumped 3.7 percent after climbing 2.2 percent in October, driven by a 4.7 percent surge in grain prices. Clothing prices gained 0.1 percent, the first increase since at least 1999. For the first 11 months, consumer prices rose 1.3 percent from the same period last year.

Food prices are ``volatile'' (sound like fedtalk...) and aren't likely to cause inflation to skyrocket, .....

Trade Surplus
The Shanghai and Shenzhen 300 Index rose 2.3 percent as of 1:01 p.m. local time. The yield on the 3 percent local-currency bond due in December 2008 fell 5 basis points to 2.95 percent

As China today reported its second-largest trade surplus ever, the central bank sold 120 billion yuan ($15.3 billion) of one-year bills to lenders in the biggest sale this year, draining cash from the financial system. The November surplus was $22.9 billion.
``Headline inflation is not much of a problem right now for ...... ``It is quite benign and mostly affected by agricultural products.''

Energy Prices
The central bank last month forecast consumer inflation will ease to 1.5 percent for 2006 from 1.8 percent in 2005.(good call with the 1,9% number reportet..../hat ja wunderbar hingehauen....)
Even so, it said inflation could quicken as China deregulates energy prices and boosts welfare spending. In addition, a possible rebound in investment could send raw material costs higher, the bank said. (how do you than come up with an low inflation estimate? could only be if the yuan wil strenghten significantly/ wie kann man da mit ner niedrigen inflation rechnen? geht wohl nur wenn der yuan weiter deutlich aufwertet.)

....China, which controls gains in the yuan, should allow faster currency appreciation to prevent export-driven money inflows from fanning inflation, .....(china is not alone with this kind of problem. watch the problems in the middle east oil exporters "prices are rising in the UAE at an annual rate of 7%, but independent estimates put it at 15%."

``By allowing the currency to appreciate, China could help lower the import cost of food,'' (and of course oil!!)

Interest Rates
Zhou raised interest rates in April and August and has ordered lenders to set aside more money as reserves three times this year.

On Dec. 7, Zhou and his colleagues said they plan to achieve a ``stable'' monetary policy and ``adequate'' money supply growth next year and seek to balance international payments. M2 money supply rose 16.8 percent ( always a matter of perspective what "adequate" means. / alles ne frage der definition von "adequat" )

China's stocks had the biggest fall in almost five months on Dec. 8, after state media suggested the government may raise rates to cool the property market. ( sound familiar/ klingt vertraut)

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