inflation in china

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Why Inflation in China Could Lead to Another Global Recession

Inflation in China is far more intractable than official headline statistics reveal.

That's potentially bad news for global growth and toppy stock and commodities markets.

If China effectively dampens dangerously high inflationary expectations and real, rapidly rising food, property and fixed-investment assets by hitting the brakes too hard, global growth could skid and potentially stall out.

The resulting sound of breaking glass would likely be clear support levels enjoyed by rising stock and commodity markets as they finally correct, along with theories of China's infinite growth trajectory.

To find out more about how China's inflation battle affects the global economy read on...

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Pay to Play: What China's Rising Wages Mean for Investors

There's a sea change underway in China's economy - one that's evident in soaring prices, shrinking trade surpluses, and higher property values. And it's being driven by higher wages for workers that for decades have been grossly underpaid.

From the country's fast-growing urban centers to its frontier countryside, wages are rising rapidly across China.

China's 31 provinces boosted minimum wages by an average of 24% last year, according to Yin Weimin, China's minister of human resources and social security. Meanwhile, the average monthly income for migrant workers rose 13% to $256.89 (1,690 yuan).

Six provinces already have raised minimum wages this year, and labor shortages and government mandates will likely compel the remaining 25 to follow suit.

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China's Five-Year Economic Plan Calls For Slower Growth

China will take steps to cool off its red-hot economy in the next five years largely by increasing domestic consumption and de-emphasizing exports, Premier Wen Jiabao announced in an online chat with the country's citizens on Sunday.

Wen, China's leading economic official, said the government's official target for average gross domestic product (GDP) growth over the next five years will be reduced to 7% annually, down from a target of 7.5% in the past half decade.

China needs to slow economic growth to curb soaring food and housing prices and to restructure its economy, even as most developed economies around the globe struggle to sustain expansion.

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