CASS economists warn of high inflation risk

Economists at the Chinese Academy of Social Sciences (CASS) have warned that Beijing risks severe inflation if it does not tighten monetary policy, the South China Morning Post reported. Writing in China Securities Journal, He Fan and Yao Zhizhong said maintaining the "moderately loose" monetary policy supported by Beijing could lead to "serious economic overheating," with the economy growing at up to 16% this year. An "appropriate" policy would push GDP growth to 11.6%, while withdrawing all loose monetary measures would lead to economic growth of 7.7%, they said. A faster recovery could follow the stronger-than-expected trade figures for December, which showed exports growing 17.7% and imports up 56%.