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Credit and trade spurt raise inflation fears

By Zhu Qiwen | China Daily | Updated: 2007-03-14 06:34

A 2.7-percent rise in consumer price index (CPI) alone may not be enough to prompt policymakers to apply the brakes on prices. But in view of the soaring trade surplus and a stronger-than-expected growth in new loans, the monetary authorities would do well to keep one foot on the brake.

After a brief dip from 2.8 percent in December to 2.2 percent in January, China's headline CPI rebounded to a 2.7-percent rise year-on-year last month.

The inflation figure in itself is benign since it remains within the 3-percent target the People's Bank of China has set for this year.

Credit and trade spurt raise inflation fears

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