China: Strong consumer price numbers - Rabobank

Elwin de Groot, Research Analyst at Rabobank, notes that China’s consumer prices rose by a more-than-expected 2.3% in Jan. (from 1.8% in Dec.), but the key driver was food, as prices were driven higher by lunar year demand.

Key Quotes

“So provided this is a temporary spike, policy makers are unlikely to take their foot off the throttle. Indeed, Bloomberg is reporting that Six Chinese provinces (with a combined population exceeding that of the US) are preparing to introduce subsidies for light-truck purchases, to stimulate growth.”