China beats inflation target

China’s consumer price index (CPI) rose by 2.3pc year-on-year in July, according to the National Bureau of Statistics, remaining stable on the 2.3pc rise in June.

The stable inflation figures follow an acceleration in Chinese growth, after authorities introduced measures to boost activity in reaction to a slowing gross domestic product at the beginning of the year.

“In general, China’s inflation outlook remains mild,” said economists from ANZ Bank in a research note. “However, the deflation risks may even rise in the foreseeable future if the growth momentum weakens again.

“Against this backdrop, the central bank should maintain an accommodative bias in the monetary policy stance.”

Last month, the International Monetary Policy Fund warned that China faces a “hard landing” before the end of the decade, unless policymakers implement structural reforms that will make growth sustainable over the long term.

In its annual health check of the Chinese economy, the IMF recommended that the country targets growth of less than 7pc next year, in order to reach its goal of achieving a “more sustainable growth path”.

The fund said that without a change in the pattern of growth – a shift from a reliance on investments and export to increased consumption – the risk of depressed growth for a “protracted period” of time was “medium” to “likely” before 2020.

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