China sees steady growth into the Year of the Rooster
By Georgi Ninov - Research Analyst
Before the Chinese New Year in Q4 2016 the Chinese economy recorded its first spike in annual growth since Q4 2014 - 6.8% compared to 6.7% for Q3 2016. Nevertheless, the growth for 2016 as a whole has amounted to 6.7% - around 0.2 % less than 2015.
With increasing demand for cash before the holiday, the People's Bank of China injected a record amount of funds into the financial market - 1.13 trillion RMB on January 20th, 2017. This move was followed by a tightening of the medium-term lending rates - both of them were rather unexpectedly increased on January 24th, 2017 with the goal of the Chinese government to stabilize liquidity.
Food prices rose sharply in the days preceding the Lunar New Year. This is felt especially strong with vegetables and meat. For some foods the increase is not only noticeable over the holiday period but also compared to the previous year - pork price is about 7% higher compared to the same period in 2016.
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