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China Monthly

Inflation, Trade Tensions Heat Up

EXECUTIVE SUMMARY

The slowdown in China’s economy looks to have continued in July, with industrial production, exports and investment all decelerating as RGE has been anticipating. Meanwhile, massive flooding and expectations for a weak fall harvest pushed up food prices, likely tipping the CPI back above the central bank’s 3% comfort level. RGE continues to expect a 27 basis point (bp) rate hike around the end of Q3, though a decelerating economy could keep the People’s Bank of China (PBoC) on hold until 2011. A relative bright spot in the July data looks to be retail sales, in[...]

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