Uncontrolled $ printing spurring China's inflation: Chinese minister
27 Oct 2010
Uncontrolled printing of dollars by the US Federal Reserve is spurring inflation in China and creating difficulties for the nation's businesses, according to Chinese commerce minister Chen Deming.
''Because the issuance of dollars is out of control, and international commodities prices are continuing to rise, China is confronted with imported inflation, which has created major uncertainties for businesses,'' Deming was today quoted as saying by state media China Business News.
"Given the current situation, companies have thought ahead and prepared for exchange rate fluctuations as well as an increase in labour costs."
Deming's comments came after China revealed last week that although its economy grew 9.6 per cent compared to a year earlier in the September quarter, it was down from 10.3 per cent the previous quarter. However, inflation rose in September to 3.6 per cent from 3.5 per cent in August. (See: China's economic growth slows as inflation rises in third quarter)
The rise in inflation in September of 3.6 per cent was at the fastest pace in two years and above what Beijing's target of 3 per cent for entire 2010.
Deming's comments are aimed at the US Federal Reserve, which is scheduled to meet on 2 and November, when it may announce additional stimulus measures like making new round of asset purchases known as quantitative easing.
Western and other nations have targeted Beijing for artificially keeping the yuan low and not allowing it to appreciate against freely-traded currencies.
