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Economist: Inflation worry exaggerated in China

By Zhang Jiawei (chinadaily.com.cn)
Updated: 2010-11-25 10:02

Inflation worry is exaggerated in China and inflation is not just a price increase as seen in many commodities in China recently, according to an economist.

Robert Blohm, an investment banker and economist operating from Beijing, speaks to reporters while attending the Global Sustainable Leaders Forum in Beijing, Nov 23, 2010. [Photo/chinadaily.com.cn]

"Over-concern of inflation will force the Chinese government to take measures that will stop the economy from growing," Robert Blohm, an investment banker and economist operating from Beijing, said while attending the Global Sustainable Leaders Forum in Beijing on Tuesday.

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"If you are worried about inflation, don't try to use simple monetary policy or bank policy, which has limited ability," Blohm said.

"Inflation is not just a price increase. If that were true, all of China's development is only inflation," he said.

Last Friday, China's central bank ordered a 50 basis point increase in reserve ratios for banks in an effort to cool rising inflation expectations after consumer prices rose 4.4 percent in October, the fastest pace in 25 months.