Is China's inflation rate statistic just a head fake? This article in 11/13/10 China Daily News:
"Expert: China has no inflation problem
By Gao Yuan (chinadaily.com.cn)"
"China has no inflation problem because the current commodity prices hike were caused by supply shortage and not by an excessive amount of currency being issued, said Wang Guogang, head of institute of finance and banking at Chinese Academy of Social Sciences, at the academy's annual forum held on Thursday.
"If a country's consumer price index (CPI) is higher than three percent in six successive months, it can be defined as inflation by Western standards," Wang said. "But the price changes of agricultural products are not included when Western countries calculating their CPIs."
"Agricultural products account for one third of the goods used to calculate China's CPI, he said, adding that the high prices of agricultural products were caused by this year's frequently occurring natural disasters.
Hu Xiaolian, deputy governor of the People's Bank of China, said that the country's short-term inflation pressure is not so bad.
The central bank will continue to monitor the market and implement more flexible measures to stabilize the prices, and hasn't ruled out the possibility of increasing the interest rates again, she said."
AI
