Nomura advises China to raise interest rate slightly

Nomura believes that "Twelve-Five" China may face more severe inflation, and appropriate monetary policy is an important means to deal with inflation "Caixin net" (reporter Horon) "If the one-year deposit rate is lower than the inflation rate, it will add to inflation expectations, and a small incremental rate hike would help lower inflation expectations.　　Kinoshita, head of Nomura's Asian economic Research, advises. October 18, Kinoshita in interpreting China's "Twelve-Five" economic policy guidance, pointed out that, China's next five-year plan is similar to Japan's the 1960s revenue multiplier, with the biggest difference being that inflation is not a big problem for Japan at the time, but that China is likely to face more severe inflation in the next five years,　　is a problem that the government should focus on. At present, domestic policymakers and researchers worry that interest rate hikes will further widen the U.S.-China spreads, bring international capital inflows and exacerbate pressure on the renminbi.　　In this respect, under the Kinoshita, many Asian countries, including China, are facing a growing influx of capital due to a certain spread with the United States, but because of China's capital-account controls to control inflows of foreign capital, "raising interest rates will not pose a big problem for China". To tackle the inflation problem, Kinoshita also suggested that China should further improve labour productivity. He pointed out that in the past decade, China's economic growth has remained at around 10%, but the rate of non-food inflation is very low, mainly depends on the rapid increase in labor productivity, in the next five years, if labor productivity growth slows down, enterprises can only transfer costs to consumers, therefore, should encourage higher value-added industry productivity,　　To avoid high inflation. Kinoshita is optimistic about China's economic growth over the next five years.　　In 2011 and 2012, he predicts, China's economic growth will reach 9.8% and 9.5% respectively, and will surpass 8% in 2013 years.　　As for the policy guidance during the "Twelve-Five" period, Kinoshita suggested that China should focus on improving household consumption capacity, promoting regional economic development and solving energy and environmental problems. October 15 to 18th, the 17 session of the CPC v Plenary considered the adoption of the CPC Central Committee on the formulation of national economic and social Development of the 12th five-year plan proposal. The whole plenary set forth the core theme of speeding up the transformation of economic development mode.