China raises reserve requirement

China's fight against inflation continues. China View reports:

China's central bank announced on Monday that it would raise the reserve requirement ratio for commercial banks by half a percentage point to curb excess liquidity and ease inflation.

This is the fourth such move this year, and it will lift the country's reserve requirement ratio to a new high of 16.5 percent as of May 20.

This comes on the same day that China reported a rebound in inflation.

China's consumer price index (CPI),the main gauge of inflation, rose 8.5 percent year-on-year in April, the National Bureau of Statistics (NBS) said on Monday.

The figure, compared with 8.3 percent in March and a nearly 12-year-high of 8.7 percent in February...

Food prices soared 22.1 percent in April, 0.7 percentage points higher than in March...

Non-food prices in April were up 1.8 percent year-on-year, compared with 1.4 percent in November.

The producer price index (PPI), which measures the value of finished products when they leave the factory, rose 8.1 percent in April year-on- year, setting three-year highs for a fourth consecutive month.

Meanwhile, foreign direct investment is surging.

China saw 35.02 billion U.S. dollars worth of foreign direct investment (FDI) utilized in the first four months, up 59.32 percent from the same period last year, the Ministry of Commerce (MOC) said on Monday.

The number of newly approved foreign-funded enterprises, however, shrank 23.15 percent to 9,490 in the January-April period.

But there are signs that China's trade surplus has peaked.

China's trade surplus reached 16.68billion U.S. dollars in April, the General Administration of Customs said on Monday.

The figure was down 1.14 percent year-on-year but up 24.5 percent from 13.4 billion U.S. dollars in March, and it almost doubled the 8.6 billion U.S. dollars posted in February.

Exports in April rose 21.8 percent over April last year to 118.71 billion U.S. dollars, while imports rose 26.3 percent to 102.03 billion U.S. dollars...

Total trade in the first four months hit 791.1 billion U.S. dollars, up 24.4 percent year-on-year. The four-month trade surplus was 58 billion U.S. dollars, down 5.32 billion U.S. dollars year-on-year.

Exports in the four-month period were 424.6 billion U.S. dollars, up 21.5 percent, or 6 percentage points less than a year earlier. Imports were 366.6 billion U.S. dollars, up 27.9 percent, or 8.8 percentage points more than a year earlier.

However, none of these reports would have rocked China as much as the earthquake in Sichuan.