Inflation in China 'out of control'

11 April 2011

Inflation in China is spiralling out of control, it has been claimed.

Billionaire investor George Soros noted the country's decision to retain its weak currency has increased the risk of wage-price gains, Bloomberg reports.

At a conference in New Hampshire, the expert said that while the policy safeguarded China during the financial crisis in 2008, it has resulted in the nation missing the opportunity to allow the yuan to appreciate to tame inflation.

Mr Soros said it would have been very advantageous to follow this procedure, adding: "The authorities missed that opportunity. You now have inflation somewhat out of control and causing some serious danger of wage-price inflation."

The yuan's gain of 4.6 per cent against the US dollar in the last two years was the second-smallest of ten Asian currencies looked at by Bloomberg.

Last month, chairman of Patek Philippe Thierry Stern said it would be a mistake to overinvest in China, as the market is likely to lose pace, the new agency reported.

By Asim Shah

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