CCTV News: Rising Prices in the Crosshairs
On Thursday, I was on CCTV News BizAsia talking about some of the challenges China is facing keeping both prices and growth on track. In the first interview clip, I discuss the factors that drove oil and gold prices to new heights this week, and what those higher commodity prices mean for the Chinese economy. Along with my comments, readers might also be interested in the accompanying report on continuing strong demand in China for retail purchases of gold — particularly gold bars — a phenomenon that I’ve noted several times already on this blog, as early as last May. It seems that trend is still going strong.
In the second clip, I talk about the decision by China’s central bank to raise the reserve requirement ratio (RRR) for banks yet again, whether or not this signifies that China is now truly serious about imposing a tighter monetary policy, and how effective such policies are likely to be in combating inflation. The basic message: the evidence from this past month indicates that China’s central bank is finally serious about tightening, but that commitment is going to run into some strong political headwinds when those measures begin to bite and start having a real slowing effect on China’s go-go economy.