Friday 12 February 2010

China warns of financial risks even as inflation slows

Inflation in China turned out lower than feared in January but authorities there still appear concerned about credit growth. AFP/CNA reports:

New lending surged to 1.39 trillion yuan (203.5 billion dollars) last month, and property prices rocketed at the fastest rate since April 2008, figures from the National Bureau of Statistics said...

Following the release of the data, the central bank called for vigilance against "possible hidden systemic financial risks" and controls on credit in a report that otherwise announced no new major policies.

"Credit funds will support projects under way, and loans for new projects are to be strictly controlled," it said without elaborating...

Meanwhile, inflation in January was lower than expected, with the consumer price index rising just 1.5 percent year-on-year.

The increase was mainly driven by food prices, which rose 3.7 percent during the first month of the year. But inflation slowed from December, when prices rose 1.9 percent...

Property prices in 70 medium and large cities meanwhile rose 9.5 percent in January from the same month a year ago, the fastest pace since April 2008...

The prices increased by 1.3 percent last month from December, according to a statement on the National Bureau of Statistics website.

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