Asset Allocators' Soapbox: China troubles

There are many issues worrying investors in the world today, such as the situation in the Middle East and the tensions in Europe. However, the inflation path in China, and how well the authorities there cope with a slowing economy, come high up the list. Recent news has not been good. In May, China’s consumer price inflation (CPI) reached a new cycle peak of 5.5%, its highest since July 2008. Back then the inflation surge forced Chinese policymakers to tighten policy aggressively. Its timing was very unfortunate, coinciding with the credit crunch beginning in earnest in the US, leading u...