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China to continue its proactive stimulus policies next year PDF Print E-mail

Thursday, 10 December 2009

China would continue its proactive fiscal policy and moderately easy monetary policy next year and endeavor to improve the economic growth quality, according to the Central Economic Work Conference.

It has been widely worried that China's asset bubble is growing fast due to China's stimulus policies.  With housing prices and stock prices shooting up, will the continued policies make China more bubble prone?

China's consumer price index (CPI), a main gauge of inflation, had declined for the last nine months, but it is expected to see a year-on-year growth between 0.5 percent to 0.6 percent in November.

The producer price index (PPI), a major measure of inflation at the wholesale level, has also began climbing since the latter half of October, with prices of energies, non-ferrous metals, steel, rubber, among others reporting rises, according to figures by the Ministry of Commerce.

It is commonly believed that inflation is not a major concern in the short term due to China's over capacity and slow international recovery, but the worry is what happens in the future.

 
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