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Chinese Inflation Hits Record

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...rather than the bad kind, you know, when your currency falls by 40% because your central bank has been printing too much of it and its been inflating assets rather than expanding infrastructure, business and everything else that makes your country great...

http://news.bbc.co.uk/1/hi/business/6988593.stm

Chinese inflation at decade high

Last Updated: Tuesday, 11 September 2007, 07:12 GMT 08:12 UK

Chinese inflation has hit its second 10-year high in two months, led again by a further sharp rise in meat prices.

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...rather than the bad kind, you know, when your currency falls by 40% because your central bank has been printing too much of it and its been inflating assets rather than expanding infrastructure, business and everything else that makes your country great...

http://news.bbc.co.uk/1/hi/business/6988593.stm

Chinese inflation at decade high

Last Updated: Tuesday, 11 September 2007, 07:12 GMT 08:12 UK

Can someone explain to an economics novice, the significance or impact this has on the UK?

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...rather than the bad kind, you know, when your currency falls by 40% because your central bank has been printing too much of it and its been inflating assets rather than expanding infrastructure, business and everything else that makes your country great...

http://news.bbc.co.uk/1/hi/business/6988593.stm

Chinese inflation at decade high

Last Updated: Tuesday, 11 September 2007, 07:12 GMT 08:12 UK

It will spill over here very soon! :lol:

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It will spill over here very soon! :lol:

And it will make the chinese less competitive in a global ecconomy.

In 30 years at this rate we will be able to compete again!

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Can someone explain to an economics novice, the significance or impact this has on the UK?

Main point is that price pressure in China will inevitably feed through to domestic wage increases, such is the well trodden path of many developing nations in the past. The combination of these two factors will increase the cost of producing goods in China, and ultimately the price we pay for these goods on the UK high street.

In short, it may lead to an increase in UK CPI which will in turn affect interest rate policy. It's the gradual shift from "exporting inflation" to "importing inflation", or cost-push inflation in classic terms.

This is one of the reasons why I voted for stagflation in the poll.

Edited by GARCH

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I listened to the bbc interview some chinese in shanghai. It resonated with whats going on in the uk. People feeling the pinch, and wages not keeping up. China will increase interest rates to put a lid on it Im sure. It looks like in order for chinese to be able to feed themselves, they are going to stop subsidising us. They will put their prices up across the board. We will stop buying their tat, and then the fun will begin there. You think we have problems coming. At least we only have ourselves to blame. The chinese people will be after the unelected ruling class...

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I listened to the bbc interview some chinese in shanghai. It resonated with whats going on in the uk. People feeling the pinch, and wages not keeping up. China will increase interest rates to put a lid on it Im sure. It looks like in order for chinese to be able to feed themselves, they are going to stop subsidising us. They will put their prices up across the board. We will NOT stop buying their tat, and then the fun will begin there. You think we have problems coming. At least we only have ourselves to blame. We will continue to buy the tat at inflated prices. They will get richer and global imbalances will be corrected at our expense.The chinese people will be after the unelected ruling class...

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And it will make the chinese less competitive in a global ecconomy.

In 30 years at this rate we will be able to compete again!

China has problems on the way. Its 1 child policy and lack of social welfare/pension is a timb bomb about to go off. Traditionally you were looked after by your kids. But how can the 1 child look after both mum and dad and make a living? There are also conflicts ahead as the ageing farming population is nolonger able to support the new economy. America borrowed too much from China but China conversly lent too much. As US concumption falls, China's export economy will be hard hit. I for one am considering reducing my exposure to China.

There is actually no reason why all economies cant prosper, you dont actually need one to drop off for another to pick up. Its not a zero sum game as they say :).

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China has problems on the way. Its 1 child policy and lack of social welfare/pension is a timb bomb about to go off. Traditionally you were looked after by your kids. But how can the 1 child look after both mum and dad and make a living? There are also conflicts ahead as the ageing farming population is nolonger able to support the new economy. America borrowed too much from China but China conversly lent too much. As US concumption falls, China's export economy will be hard hit. I for one am considering reducing my exposure to China.

There is actually no reason why all economies cant prosper, you dont actually need one to drop off for another to pick up. Its not a zero sum game as they say :).

Jesus Chr*st!!! Orbital has actually posted something that makes sense!!!

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Chinese Inflation Hits Record, 6.5% YOY

I know GB and the UK government are now fairly expert at getting statistics and figures to show what they want them to, but they have a very long way to go to be as good as the Chinese. Inflation at 6.6% :lol:

Maybe they are talking about export inflation? or maybe not. Domestic inflation in China is running at well over 25% for quite some time whichever way you measure it. Somehow they have managed to keep export inflation this year to below 10%.... so far, how have they managed this? and how long can they keep this up for? are the questions that need be addressed.

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Can someone explain to an economics novice, the significance or impact this has on the UK?

This is where things get interesting.

on the plus side for the UK,

china is taking the biggest hit in the rise in raw materials prices.Raw materials and labour are the two biggest overheads in most companies....hence why we don't manufacture too much these days.

...face-to-face retail and sales is the next casualty of the UK...we're being trained to go "virtual"

on the minus side for the UK.

the chinese currency will be allowed to gradually get stronger.This means all those workers get more buying power for these cheap goods we've taken for granted.

at the same time,money flow will weaken our currency versus theirs,making what we import from them much more expensive.

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