The seasonal food price spikes will not change the easing trend of inflation.
While it is likely the pace of RMB appreciation will pick up before Vice President Xi’s visit to the US, it will also lose momentum afterwards.
Accusing the soft-landing camp of "uncritically accepting" China's growth story and placing an "overblown belief" in Beijing authorities, Chancellor listed 10 tell-tale traits of an economy on the verge of collapse
China’s manufacturing sectors are set to slow further into the first quarter of this year, due to headwinds from external markets and still weak domestic demand.
It might be a bit too early to declare that the euro area crisis is all over.
China’s ongoing slowdown will likely take GDP growth to around 8% in 1Q. That said, fading inflationary pressures currently provide more than enough room for further policy easing.
Despite the strong push by France on introducing an EU-wide financial transaction tax, it appears that the chance of such proposal being adopted by all EU countries in the near term is rather remote.
Prices are still likely to spike temporarily around the Chinese New Year, but the overall inflation trend should continue to normalize through 2012, leaving ample room for Beijing to ease policy to reflate the economy.
Easing inflation provides room for more easing measures which will keep China on track for a soft landing.
Selective easing started to take effect and will continue to filter-through to support small companies and ongoing projects. China’s still on track for a soft-landing.
With inflation still above 4% and IP growth still above 13%, an imminent outright easing remains unlikely.
The moderate cooling of Mainland inflation continues, leaving room for Beijing to push on with selectively easing.
Hard-landing fears remain unwarranted. We expect IP growth to hover at around 13% and for monetary policy to be kept stable in the coming months.
Growth is slowing amidst policy tightening but the underlying strength of domestic demand should ensure a soft-landing.
Barring selective easing for small companies, the PBoC will likely hold monetary policy stable, as inflation is expected to ease only gradually in the coming months.
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