Slowing Gives Beijing Room to Loosen Policy
BEIJING--A raft of economic data released on Friday showed continued slowing of China's economy, suggesting officials will loosen monetary policy further in the months ahead to support growth.</br></br>Industrial-production growth slowed to its lowest level since July 2009 in the first two months of the year, while property sales continued a steep decline that dates from late last year. New loan volumes were down from the first two months of last year.</br></br>Inflation slowed sharply in February, according to the country's National Bureau of Statistics, potentially giving policy makers confidence that they can stimulate the economy somewhat without setting off prices.</br></br>"Today's whole slew of inflation and industrial production data were lower than our expectations, and we think the central government will surely step up policy-loosening to boost economic growth," said Standard Chartered economist Li Wei (eds: Mr. Li). "The government may take measures like increasing investment and government expenditure, as well as stepping up lending."</br></br>China has cut banks' reserve requirements twice since late last year, freeing up funds for lending--but has not cut interest rates, which could risk reigniting inflation or reinflating property prices.