China reported that inflation eased in the month of December. Consumer prices rose 4.1% in December on an annual basis. This was slightly lower than the 4.2% increase in November on an annual basis. While food prices have risen slightly, analysts expect the rise to be temporary. Producer prices rose 1.7% on an annualized basis. Economists expect the Chinese central bank to move their focus away from fighting inflation and loosen monetary policy to stimulate growth. The People’s Bank of China has already lowered reserve ratio requirements of banks to encourage more lending. The real estate market in China has seen a bubble burst with mortgage owners under water in their loans. Read more
