Speculation on China interest rate hike

http://www.bloomberg.com/news/2010-12-11/china-interest-rate-speculation-splits-analysts-former-pboc-official-wu.html


China can’t raise interest rates because of the risk of attracting inflows of cash that would fuel inflation, said Wu Xiaoling, a former deputy governor of the central bank.

“The global low interest-rate environment prevents China’s central bank from raising interest rates,” Wu said in a speech at a hedge fund conference in Shanghai today. Emerging markets face capital inflows and “excessive money supply is one of the important reasons for China’s inflation,” she added.


China Inflation `Fight' May Widen as Growth Withstands Tightening Measures

http://www.bloomberg.com/news/2010-12-11/china-s-inflation-tops-5-adding-pressure-for-wen-to-raise-interest-rates.html