China: Your Cheat Sheet to the HUGE Economic News

We’ve all heard it: China’s (NYSE:FXI) economy is booming. While we’re weathering a recession and witnessing record foreclosures and dropping property values, real estate (NYSE:IYR) prices in China’s biggest cities have skyrocketed just in the last year, to the point that the government is getting involved to try to stop the market from growing too fast. Now that’s a problem to have. So why do the Chinese seem to be outpacing just about everyone else? It may be their work ethic, or their massive work force, or their government, which wields an inordinate amount of authority over Chinese industry compared to our laissez-faire capitalism. Whatever the cause, there’s no denying the effect. So to keep you in the know, here’s your cheat sheet to China:

  • China’s annual inflation rate rose 5.5% this year.
  • Inflation has exceeded the government’s 4% target each month this year
  • China has raised interest rates four times since September and has allowed the yuan to gain about 1.6% against the dollar.
  • Food prices in China rose 11.7% in May year-over-year as pork costs surged and vegetable prices rebounded late in the month.
  • China’s producer prices rose 6.8% in May and non-food inflation rose to 2.9 percent.
  • Industrial production rose 13.3% in May year-over-year, slightly down from the 13.4% gain in April.
  • Retail sales rose 16.9%, also down from 17.1% in April and 17.4% in March. Weaker sales are in large part due to decreases in auto sales after the expiration of government incentive plans, and do not suggest an overall trend.
  • Fixed-asset investment (excluding rural households) has expanded 25.8% so far this year, with real fixed-asset investment of around 17% to 18% growth when adjusting for the inflated price of raw materials.
  • Real estate prices in Hong Kong are up 50% in the last year, and prices in Shanghai and Beijing are up 26% and 28%, respectively.

BONUS: Are Chinese Investors Pushing Up Property Values Across the Globe?