SHARP RISE IN CHINESE INFLATION PUTS PRESSURE ON INTEREST RATES

 
By Richard McGregor in Beijing
Wednesday, September 12, 2007
 
Pressure grew yesterday for China to raise interest rates sharply in the coming months after inflation hit 6.5 per cent in August, the highest in more than a decade.

Inflation was pushed up from July's 5.6 per cent rate by rapidly rising food prices, which were up 18.2 per cent year-on-year in August, as a shortage of pigs and pork, a staple meat, and higher feed costs buffeted grocery and vegetable markets.

High and rising inflation, particularly when driven by food prices, will reduce the living standards of Chinese workers, threatening unrest unless wage rates rise to compensate.

But wage inflation would risk fuelling more general price inflation, similar in effect to an appreciation of the Chinese currency. In advanced economies, import prices of Chinese goods would rise, complicating the lives of central bankers grappling with the credit squeeze as higher inflation would make it harder to justify interest rate cuts.

In comments last week, Zhou Xiaochuan, the governor of the People's Bank of China, said he would like to see an end to negative real interest rates, a signal of support for more rises in borrowing costs.

One-year deposit rates are only 3.6 per cent and the returns on interest income are taxed, so rising inflation adds an extra incentive to savers to spend money rather than save it or risk it in a dangerously frothy stock market.

Higher interest rates would seek to slow the economy's growth and rein in the inflation rate. The PBoC, which has already lifted interest rates four times this year, is not an independent central bank and any further rate increases must be approved in consultation with Wen Jiabao, the premier.

[用户系统信息]Mozilla/4.0 (compatible; MSIE 6.0; Windows NT 5.1; SV1; (R1 1.3))

中国8月份通胀率达6.5%

 
英国《金融时报》马利德(Richard McGregor)北京报道
2007年9月12日 星期三
 
昨日公布的数据显示，中国8月份通胀率达到6.5 %，为逾十年来的最高水平，从而加大了中国在未来数月内大幅加息的压力。

由于中国主要食用肉猪肉短缺，以及饲料成本上升对食品和蔬菜市场造成冲击，食品价格迅速上涨（8月份较上年同期上涨18.2%），从而推动通胀局势进一步加剧。中国7月份的通胀率为5.6%。

居高不下且日益加剧的通胀水平将导致中国工人生活水平下降（尤其在推动力量来自食品价格的情况下），除非工资涨幅足以抵消通胀影响，否则就可能造成社会动荡。

不过，工资上涨可能刺激价格出现更为普遍的上涨，其影响与人民币升值类似。在发达经济体，如果中国产品的进口价格上升，将使正在应付信贷紧缩难题的央行行长们面临更为复杂的任务，因为通胀加剧可能使降息的理由更难以站住脚。

中国央行(PBoC)行长周小川上周发表讲话时称，希望实际利率为正值。这一信号表明央行将支持进一步提高借贷成本。

目前中国一年期存款利率仅为3.6 %，并且利息收入需要缴税，因此通胀日益加剧进一步刺激人们消费而非储蓄，或者是冒险将资金投入泡沫已经大得危险的中国股市。

加息旨在放缓经济增长，并抑制通货膨胀。中国央行今年已经四次上调利率。中国人民银行并非一个独立的央行，批准任何加息决定都必须与中国总理温家宝进行商议。