Tuesday, 10 February 2009

China's inflation rate approaches zero

Inflation fears have completely vanished in China. From AFP/CNA:

Chinese inflation slowed further in January as activity in the world's third-largest economy weakened, government data showed Tuesday, with economists warning deflation was imminent.

The consumer price index, the main gauge of inflation, was 1.0 per cent in January, down from 1.2 per cent in December, the National Bureau of Statistics said Tuesday...

In an ominous sign of things to come, producer prices, which measure trends at the wholesale level, fell by 3.3 per cent in January, the state-run Xinhua news agency said.

In other news on China today, the country reportedly overtook the US as the largest auto market in January. AFP/CNA reports:

A total of 735,000 automobiles were sold in China last month, state television said, citing Dong Yang, deputy director of the China Association of Automobile Manufacturers.

By contrast, 656,976 vehicles were sold in the United States, according to preliminary estimates issued last week by market research firm Autodata.

However, analysts said January was an unusual month because the Lunar New Year boosts sales in China as the United States sees a post-Christmas drop, and for the full year the US was expected to remain the world's largest market.

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