China Inflation Beats Expectations


China inflation reached a 28-month high beating analysts forecast figure. China inflation is threating China’s growth. China is believed to lead growth of world economy after the worst financial crisis erupted in October 2008. China implementedChina food prices a stimulus package worth $586 billion to offset the effect of the financial crisis, originated in the US and spread rapidly to whole of the world.

Because of China’s stimulus, food prices began to rise. China’s inflation stood at 4.4% in October. It rose to 5.1% year-on-year in November prompting the government to raise benchmark interest rate. China increased its bank rate for the first time in October 2010 after the financial crisis. China’s target figure for inflation has been 3%. Food prices are rising in China contributing to inflation rise. Chinese authorities fear poor people will resort to riots due to rising food prices.

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