China announces measures to combat inflation
Chinese Premier Wen Jiabao announced that his government will take measures to contain inflation but did not say whether it will be a rise in interest rates.
The statement, published on the website of the government, has caused a sharp drop in the Shanghai Stock Exchange
The statement, published on the website of the government, has caused a sharp drop in the Shanghai Stock Exchange (-1.9%) with the titles tied to raw materials, of which China is the main consumer in the world, in sharp decline. Sales have notably been Minmetals Development (-9.73%), Western Mining (-7.1%) and Anhui GoldenSeed Winery (-5.89%). "Great attention should be given to the prices of supply and demand of the market because they have a relationship with the fundamental interests of the citizens"
said the premier. The government, he said the Chinese premier, "is preparing measures to contain prices." According to statistics from the prices have peaked in October, with an annual increase of 4.4%, although the Chinese press says that the real increase in certain food is actually much larger.
Fears of inflation are exacerbated in China
Fears of inflation are exacerbated in China after the U.S. central bank, the Federal Reserve announced it will begin selling $ 600 billion to support the 'economy. According to the newspaper China Securities News the measures might include setting a cap on the prices of certain basic necessities. Last month, Chinese authorities decreed the first increase in the interest rate after that of 2007.