Despite the insistence of Chinese government officials that there were combating inflation, the country’s economy grew nearly 10% in the fourth quarter, far exceeding expectations.
Thursday’s data renewed concern among global investors that rampant inflation may take hold in China. The inflation rate was 3.3% in 2010, exceeding the government’s target rate of 3%.
Inflation is not only a threat to the many investment vehicles focused on Chinese companies, it also threatens to result in further appreciation of the Chinese currency against the dollar.
In the meantime, President Barack Obama and Chinese President Hu Jintao discussed several economic issues during their meeting at the White House Wednesday. Obama pressed Hu to let China’s currency rise.