Falling prices spur expectations of China rate cut

With inflation hitting a 30-month low, China needs more decisive monetary easing and may cut interest rates further in the coming weeks, if not days, says HSBC.

Falling prices spur expectations of China rate cut
Falling prices in China spur calls for further stimulus (AFP)

China’s national ego is swelling once again as patriotic citizens proudly count the gold medals won at the London Olympics. But the national economic data released last week tells a different story.

China’s consumer price index CPI for July fell to a two-and-a-half year low of 1.8%, down from 2.2% in June. The figure is falling further from a 4% inflation target the Chinese government has set for 2012, which gave a strong signal that...

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