Eco Analysis - China's recovery is more gradual than expected (W. Yao)
■ China's food-fuelled inflation and housing-driven growth
China's February CPI increased more than expected by 3.2%yoy, but will most likely fall back again in March. Money and credit growth moderated in February but remained accommodative. Meanwhile, growth data for January and February combined were mixed. Industrial production disappointed, while fixed asset investment powered ahead, thanks to the incredibly buoyant property market. Retail sales weakened considerably, but the main cause was probably the laudable anti-corruption campaign waged by the new leaders. Overall, the data still suggest that the recovery is on track, albeit more gradual than initially anticipated.
Wei YAO
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