PBOC to stick to ‘tight’ stance

PBOC to stick to ‘tight’ stance
Goldman Sachs raises China’s 2008 inflation forecast to 6.8%

To the extent ‘actual inflation’ (whatever that actually is- I realize the difficulties in that statement) is higher ‘actual real growth’ (same qualifications) is lower.

Might partially explain high sustained rates of ‘real’ growth?

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2 Responses to PBOC to stick to ‘tight’ stance

  1. warren mosler says:

    yes, for as long as it lasts. domestic inflation isn’t the prime ingrediant for currency appreciation!


  2. Jörg Wenck says:

    But it would also mean that the Chinese should be comfortable with a rise in the yuan, doesn´t it? After all, substitution of internal for external demand would seem to require it, and (relatively) cheaper import prices for commodities ought to look very much like something worth having to them.


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