Monday Obituary: China Inflation, June 9th 2012, RIP

July 9, 2012 10:36 AM EDT Send to a Friend
The inflation rate in China eased to a 29-month low of 2.2 percent in June. The low reading prompted the following comment from Tim Condon, Chief Asia economist at ING Financial. "Inflation is dead and growth is by far the main concern in Asia."

China's 2.2 percent CPI inflation rate was slightly lower than the 2.3 percent rate that was forecast. PPI was reported at -2.1 vs. -2 percent expected.

Lower inflation rates open the door for increased stimulus from central bankers in China. The government lowered benchmark interest rates on July 5, the second move in a month. Many in China are now calling for easing on tight property controls, but so far officials are unwilling to bend and are seeking to keep home prices subdued.

iShares FTSE/Xinhua China 25 Index ETF (NYSE: FXI) is trading lower by 1.5 percent on Monday.


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