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BBC: China’s Macroeconomic Numbers Show Irregular Combination

BBC Chinese recently reported on the macroeconomic numbers that the National Bureau of Statistics released on China’s first quarter of 2012. The GDP growth of 8.1% is lower than the market expectation of 8.4%. However it is better than the annual expectation of 7.5% that the government predicted. Another important number also released was the Consumer Price Index (CPI) of 3.8%, which is considered high even though it is below the government goal of 4.0%. Well-known economist Dr. Zhang Wei, from the University of Nottingham, suggested that it is more important to examine the fact that the combination of the GDP and the CPI numbers is irregular. Usually a lowered growth rate is coupled with a lowered inflation rate. However the latest Chinese number showed that a lowered growth rate actually brought about higher inflation. He believed that this means the central government’s economic policies will become harder to implement and the Chinese economy is facing a much bigger challenge.

Source: BBC Chinese, April 13, 2012