China'S CPI Growth In August Hit A 22 Month High.

2010/10/6 17:50:00 67

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The latest report released by Barclays Capital said that as the Chinese government shifted its policy to support economic growth, it is expected that gross domestic product (GDP) growth will be bottomed out in the fourth quarter of this year or the first quarter of next year. Inflation will also have the chance to ease in the four quarter.

"Taking into account the significant tightening and the increasing external uncertainty, our view is that monetary policy and fiscal policy will remain stable for the rest of 2010 to ensure a relatively fast and steady growth of the economy."

The report says.

Barclays Capital China

Economist

Chang Jian said that as the external economy is still uncertain, the appreciation of the renminbi has accelerated, the market regulation has not been reduced, and the inflation situation is still controllable, there is no sign that the government has started the cycle of raising interest rates.

She predicts that China's GDP growth in 2010 will be 10.1%, which will slow down to 9% next year. The renminbi will appreciate 5% in the next 12 months, 6.48 at the end of September next year and 6.65 at the end of this year.

The appreciation of RMB against the US dollar has accelerated markedly in recent years, rising 1.74% in September, the biggest monthly increase in 2005.

Barclays Capital believes that China's

inflation

In the fourth quarter, there will be a chance to fall from the three quarter high, but it may come back in 2011.

Data show, China August

CPI

The increase hit a 22 month high of 3.5%.