China vs. Inflation: A Love-30 Match So Far
The actual December Consumer Price Index (CPI) came in exactly as leaked—easing to 4.6% month-on-month from the 28-month high of 5.1% pace in November. For the whole year, CPI grew 3.3% in 2010.
China’s National Development and Reform Commission was quick to declare the government's effort to contain inflation has achieved initial, incremental success. However, instead of a rally, commodities sold off the morning after, and it is fairly easy to understand the market reaction since the official figures seem to defy economic common sense.
Why does everyone seem to believe China's numbers most of the time? It isn't exactly a transparent government.