Most countries might be happy these days with double-digit growth of its GDP, in Beijing alarm bells when off when the government figures indicated a growth of 10.7 percent over the fourth quarter of 2009 while inflation is picking up. “There is too much money in the system,” tells Arthur Kroeber the LA Times. He warns that the central bank might pull back loans even faster than it did already.
“This is quite serious,” said Arthur Kroeber, managing director of Dragonomics, a Beijing-based economic research firm. “We now know they poured too much money into the system.”
Kroeber said CPI could rise to about 5% by spring.
The unusually harsh winter has damaged produce supply, sending prices upward. Chinese are especially vulnerable to these shifts because they rely more on fresh groceries.