China May Trim Stimulus to Manage Inflation as Economy Expands

The monetary stimulus that propelled China's growth to 8.9% in the third quarter may be trimmed as government officials prepare to manage inflation, says Bloomberg.

 

According to Bloomberg, China's economic expansion exceeded the 7.9% gain in the previous three months and pushed stocks lower around the world on concern the central bank may tighten monetary policy. On the eve of the release, the cabinet signaled that inflation concern will play a greater role in setting policy.

 

“Monetary stimulus is becoming unnecessary,” Kevin Lai, a Daiwa Institute of Research economist in Hong Kong told Bloomberg. “The risk is that this aggressive monetary expansion will spill into stocks and property, creating a bubble and making a hard landing for the economy more likely.”
 

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