| PBOC to stick to ‘tight’ stance |
| Goldman Sachs raises China’s 2008 inflation forecast to 6.8% |
To the extent ‘actual inflation’ (whatever that actually is- I realize the difficulties in that statement) is higher ‘actual real growth’ (same qualifications) is lower.
Might partially explain high sustained rates of ‘real’ growth?
But it would also mean that the Chinese should be comfortable with a rise in the yuan, doesn´t it? After all, substitution of internal for external demand would seem to require it, and (relatively) cheaper import prices for commodities ought to look very much like something worth having to them.
yes, for as long as it lasts. domestic inflation isn’t the prime ingrediant for currency appreciation!