Economic Updates: Lending, GDP, Inflation, Trade & RMB

Related entries: Economy, General, News, Trading

While China may not (just yet) have become the second largest economy in the world, there is plenty of action to report. Here we provide an update on recent news, including links from our ChinaBlogTweets Twitter stream.

Last year’s lending boom helped China to a rapid recovery, but now the brakes are being applied in order to manage the risk of asset bubbles and non-performing loans:

• RT @CDT: China Raises Bank Reserve Level to Cool Credit: The Associated Press… http://bit.ly/cc29bY 6:37 PM Feb 13th
• More stimu-less RT @chinaeconreview: PBoC points to gradual exit from monetary stimulus policies http://dlvr.it/1lGV 6:59 AM Feb 12th
• Or Bumpy? RT @NiuB: China: Boom Or Bust? @GadyEpstein http://bit.ly/a88wmd 7:12 AM Feb 12th

Despite that, estimates of 9.5-10% GDP growth are coming in for 2010, but with it is risk of inflation:

• CCB projections RT @China_Daily: China’s GDP to grow 9.5% in 2010 http://tinyurl.com/yjupnj4 9:17 AM Feb 10th
• RT @newschina: CASS’s Estimates for China’s 2010 Macroeconomic Indicators: China’s economy will grow 10% in 2010… http://bit.ly/atDPBu 8:04 AM Feb 9th (sub)
• RT @China_Daily: China’s Jan CPI up 1.5%, PPI up 4.3% http://tinyurl.com/yfwh76b 8:06 AM Feb 11th

This inflationary issue is of real concern for the government, but many observers feel they have the levers needed to control it. However there is some debate as to whether that is a good or bad thing, with the suggestion that wage inflation might have a positive impact:

• Wage-driven RT @ftchina: Call for Beijing to tolerate some inflation http://bit.ly/9pCxFM
• RT @fonstuinstra: RT @WageIndicator: China May Choose Wages Over Yuan Gains to Narrow Trade Surplus – BusinessWeek http://ow.ly/15NIA 4:12 PM Feb 10th

On the trade side, a surge in imports is positive, but is probably not representative, due to the impact of Chinese New Year last year:

• RT @BullishChina: China’s trade surplus narrows as imports surge – MarketWatch http://ow.ly/16xCqy 9:26 AM Feb 10th

While, talk about RMB appreciation continues. China’s approach has been firmly “gradualist”, but Goldman Sachs and others suspect a more dramatic move may be on the cards.

• RMB, more changes to come? RT @chinaeconreview: Hong Kong widens scope of renminbi business http://dlvr.it/1lbN 6:49 AM Feb 12th
• Restless RMB? RT @stinson: RT @imadnaffa: China May Let Yuan Gain 5% After Rate Increase, Nomura http://bit.ly/d1YOBI via @ChinaBizWatch 7:08 AM Feb 8th

We will see…

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