China's economy cools; inflation heats up

China’s inflation hit a three-year high of 6.4% year-on-year in June, even as overall economic growth slowed, the Financial Times reported. The new inflation figures, driven largely by a 57.1% year-on-year increase in pork prices, are the highest since June 2008. Import growth dropped off sharply in June to 19.3% year-on-year growth, down from 28.4% in May and below economists’ expectations. By contrast, Export growth was up 20% year-on-year, and the country’s trade surplus rose to US$22 billion in June from US$13 billion in May. The new figures will make economic calibration more difficult for Beijing, as it must cool rapidly rising inflation while avoiding a “hard landing” of the economy triggered by excessive monetary tightening.