Chinese inflation

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.
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Falling prices in China spur calls for further stimulus (AFP)
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<div style="text-align: left;"> Falling prices in China spur calls for further stimulus (AFP) </div>

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 Beijing will come up with more aggressive stimulus measures to revive the world’s second-biggest economy.

“The 30-month low inflation reading reinforces the case for more decisive easing actions soon,” said Qu Hongbin,...

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