China's inflation set to weaken further
14-12-2008
China's inflation will weaken further in December as the economy continues to slow, according to a key policy maker. The producer price index, PPI, will retreat "markedly" this month, increasing the possibility of deflation, said Liu Mingkang, chairman of China Banking Regulatory Commission, according to Xinhua news agency. Deflation is a situation when prices actually fall, and some economists consider it more dangerous that inflation. This is because it encourages people to postpone buying products as they expect to get a better bargain later, but that in turn only serves to further slow down the economy.
