More evidence of slowing in China
It seems to be catching. Definitive signs of weaker growth in the US and a loss of growth momentum in Europe now seems to be extending across to China as well. In the first five months of 2011, new lending fell by 12% compared with the corresponding period of last year, and by 40% vis-a-vis 2009. Policy officials in China will be pleased - they have been raising reserve requirements and hiking rates for a while now in an endeavour to rein in rampant lending growth. In recent weeks, there has also been some evidence of slowing in production, although like the US this may reflect the difficulty some producers are having obtaining key parts from Japan. Asian equities are lower once again overnight, with the Shanghai Composite down another 1%, a loss of more than 12% in the last two months. Tonight China publishes key industrial production and inflation data - there has been a suggestion by some local commentators that inflation could have climbed to 6% last month, which against the backdrop of weakening growth will complicate the PBOC's monetary policy task. |
