China Economic Growth Cools, Inflation Rises

In the Reuters report, Ben Simpfendorfer, an economist with RBS in Hong Kong, was quoted as saying, "The window for large yuan gains is closing fast. Export growth is slowing and, assuming the current trend is sustained, year-ago growth is on track to fall well below 10%." In fact, since the end of August, the yuan appreciated 2.36%, the fastest rate since it was revalued in 2005.

Inflation at 3.6% was at a 23-month high, but if food is excluded, the rate of inflation actually slowed. Food appreciated at an annual rate of 8% since last September; non-food inflation dropped from 1.5% last year to 1.4% in 2010. Food prices, it was noted, are still on the increase, although that may be slowing; China’s report noted that both grain and meat production was up, with “another bumper harvest” expected.

Industrial output, at its slowest in 13 months, missed forecasts and came in at 13.3% YOY, when it was expected to hit 13.6%. China’s trade surplus for the first three quarters of 2010 hit $2.15 billion, an increase of 38%. Domestic retail sales of consumer goods were up 18.3% YOY.