13-Sep-2010 11:44 AM

China's CPI rises to 22-month high, fixed asset investment soars

China’s National Bureau of Statistics released (11-Sep-2010) economic indicators for the country for Aug-2010, which showed China’s industrial value-added output rose 13.9% year-on-year in Aug-2010, up 0.5 ppt from Jul-2010 and the first acceleration this year after seven consecutive months of decline as the government introduced restrictions on bank lending to energy-intensive industries and the property market. China’s consumer price index (CPI) rose to a 22-month high of 3.5% year-on-year in Aug-2010, also a 0.2 ppt increase from Jul-2010. For the first eight months of 2010, China’s CPI rose 2.8%. In Mar-2010, the government set a target of maintaining 2010 full-year inflation rate at 3%. Meanwhile, the nation’s producer price index rose 3.4% in Aug-2010, down 0.5 ppt from Jul-2010. The NBS also reported the nation’s retail sales of consumer goods in Aug-2010 increased 18.4% year-on-year to USD185.4 billion while fixed asset investments for the first eight months of 2010 surged 24.8% to 2.1 trillion. People's Bank of China stated banks extended CNY545 billion (USD80 million) of new local-currency loans in Aug-2010, for the first acceleration in four months, reflecting strong demand for credit in the country (Bloomberg, 11/12-Sep-2010).