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Strong Chinese growth mean tighter policy likely

Strong Chinese growth mean tighter policy likely
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The latest government figures showed China ended 2010 with strong economic growth, but inflation continued to cause concern.

The National Statistics Bureau said China’s economy grew 10.3 percent last year compared with 9.2 percent growth in 2009.

There was a torrent of investment in property and other areas fuelled by lavish lending from state-run banks but which also fanned inflation.

In December inflation was at 4.6 percent, down from November’s 5.1 but still worryingly high.

Ma Jiantang, head of the National Bureau of Statistics told reporters: “Although the government at all levels has taken various measures, and has achieved remarkable success in keeping inflation in check, we need, in 2011, to take the task of controlling prices very seriously because there is pressure for further increases of the Consumer Price Index. On the other hand we also have good conditions for regulating inflation.”

China’s central bank has now ended the stimulus spending that was brought in to counter the global crisis in 2009 and has started tightening.

But many experts believe more is needed, particularly putting up the cost of borrowing and the strong economic growth means that could be done.

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