In his weekly newsletter as part of ARC Investment Partners, Founder and Managing Partner Adam Roseman writes about China’s inflation rate. He explains that many have been concerned about the inflation rate there as a result of the recent financial crisis.
The prediction from the price monitoring center under the National Development and Reform Commission is that China’s inflation will ease in the second half of the year. As the price monitoring center said, “At present, China’s aggregate demand and supply are basically balanced, so prices will not rise to a larger extent than before.”
Adam Roseman explained that ARC China expects the CPI growth rate to peak in June and then to fall by December. Roseman pointed out in the article that China has taken serious steps to curb inflation. As Roseman explained, “People’s Bank of China (PBOC) has raised banks’ Reserve Requirement Ratio (RRR) six times in 2010 and three times so far in 2011. It is now at nearly 20% for most banks.”