News / Asia

Inflation Rises in China as Economic Growth Shows Signs of Slowing

Inflation Rises in China as Economic Growth Shows Signs of Slowing
Inflation Rises in China as Economic Growth Shows Signs of Slowing
Peter Simpson

China's inflation rate has increased beyond government targets as the country's economic growth slowed last month. The National Bureau of Statistics said Friday the annual rate of inflation rose to 3.1 percent in May - up from April's figure of 2.8 percent. The May rate exceeds the government's 3 percent target for price increases this year.

Also in May, China's rebound from the global slump slowed, with growth in factory output and investments easing moderately.

Any slowdown in the economy produces risks for the government as it attempts to keep growth on track, to provide jobs. At the same time, Beijing needs to avoid having the economy grow too rapidly, which can cause prices to rise for key items such as food and housing.

The May figures expose growing concern within the government over how to control rising inflation in a highly complex economy said Tom Miller with the economic and research consultants GaveKal Dragonomics in Beijing.

Miller said the figures may not capture the true inflationary pressure in the economy, adding that price increases have yet to peak.

"The reasons for this is that you have had this enormous monetary stimulus and there's loads and loads of liquidity sloshing about in the economy," said Miller. "And you expect inflation to be rising and you'd expect it to hit its peak this year in about three or four months time."

To protect the economy from the worst of the global financial crisis over the past two years, Beijing's created a $586 billion spending plan, and loosened monetary policy. Some economists expect China's economy to slow as the initial impact of the stimulus wanes.

But the risk of rising inflation has prompted concern that Beijing might increase interest rates or take other steps to ease economic growth, which hit 11.9 percent in the first quarter. The government already is trying to ease the booming the housing market by tightening access to credit.

Such steps could affect the United States, Europe and others that look to China - the world's third biggest economy - to help drive global demand for exports.

You May Like

UN Watchdog Urges Israel to Probe Possible Gaza War Crimes

More than 2,100 Palestinians, most of them civilians, were killed in a 51-day war in Gaza, along with 67 Israeli soldiers and six civilians in Israel More

New Kenyan 'Thin SIMs' Poised to Transform African Mobile Money

Equity's new technology is approved in African nation for one-year trial, though industry leader Safaricom says thin SIMs could lead to data theft and fraud More

Solar's Future Looks Brighter

New technology and dropping prices are contributing to a surge in solar power More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Talks to Resume on Winter Gas for Ukrainei
X
Al Pessin
October 25, 2014 4:21 PM
Ukrainian and Russian officials will meet again next week in an effort to settle their dispute over natural gas supplies that threatens to leave Ukraine short of heating fuel for the coming winter. VOA’s Al Pessin reports from London the dispute is complex, and has both economic and geopolitical dimensions.
Video

Video Talks to Resume on Winter Gas for Ukraine

Ukrainian and Russian officials will meet again next week in an effort to settle their dispute over natural gas supplies that threatens to leave Ukraine short of heating fuel for the coming winter. VOA’s Al Pessin reports from London the dispute is complex, and has both economic and geopolitical dimensions.
Video

Video Smugglers Offer Cheap Passage From Turkey to Syria

Smugglers in Turkey offer a relatively cheap passage across the border into Syria. Ankara has stepped up efforts to stem the flow of foreign fighters who want to join Islamic State militants fighting for control of the Syrian border city of Kobani. But porous borders and border guards who can be bribed make illegal border crossings quite easy. Zlatica Hoke has more.
Video

Video China Political Meeting Seeks to Improve Rule of Law

China’s communist leaders will host a top level political meeting this week, called the Fourth Plenum, and for the first time in the party’s history, rule of law will be a key item on the agenda. Analysts and Chinese media reports say the meetings could see the approval of long-awaited measures aimed at giving courts more independence and include steps to enhance an already aggressive and high-reaching anti-corruption drive. VOA’s Bill Ide has more from Beijing.
Video

Video After Decades of Pressure, Luxembourg Drops Bank Secrecy Rules

European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video Kobani Refugees Welcome, Turkey Criticizes, US Airdrop

Residents of Kobani in northern Syria have welcomed the airdrop of weapons, ammunition and medicine to Kurdish militia who are resisting the seizure of their city by Islamic State militants. The Turkish government, however, has criticized the operation. VOA’s Scott Bobb reports from southeastern Turkey, across the border from Kobani.
Video

Video US ‘Death Cafes’ Put Focus on the Finale

In contemporary America, death usually is a topic to be avoided. But the growing “death café” movement encourages people to discuss their fears and desires about their final moments. VOA’s Jerome Socolovsky reports.
Video

Video Ebola Orphanage Opens in Sierra Leone

Sierra Leone's first Ebola orphanage has opened in the Kailahun district. Hundreds of children orphaned since the beginning of the Ebola outbreak face stigma and rejection with nobody to care for them. Adam Bailes reports for VOA about a new interim care center that's aimed at helping the growing number of children affected by Ebola.

All About America

AppleAndroid