National Bureau of Statistics data released, in November CPI up 5.1% to a record high of the year. This also makes the January-November CPI rose to 3.2% in China, has exceeded the annual inflation control target.

In fact, CPI “fever” is not only unique to China. In the “BRICs”, Brazil, Russia, India and other emerging economies are much more than the recent CPI increase default on the national inflation target.

Brazil, the latest National Geographic Bureau of Statistics data show that the first 11 months of this year, the Brazilian index measure of inflation – consumer price index has reached 5.25% increase over full-year inflation target.

Moscow, Russian Federation, Bureau of Statistics data also show that this year, the Russian consumer price index (CPI) has risen 7.2%, while last year’s increase was 8.3%. According to the Russian central bank is expected to reach Russia’s 2010 inflation rate of 8%.

September 2010, the Indian industrial workers consumer price index rose 9.8%, the rural labor force consumer price index rose 9.3%, wholesale price index rose 8.6%; and from January to September, the cumulative gains of the three figures were as high as 3.1%, 13.5% and 9.7%.

And this corresponds, Germany, France, Italy, the United States and other countries, consumer price index rose year on year the first three quarters were between 1.0% -2.0%, the highest price increases British Group of Seven, also only the first three quarters rose 3.3%.

CASH Financial senior research manager Tian Yong believes that China, India, Brazil and Russia as the representative of emerging economies on average 7% -8% of the GDP growth rate is much higher than the U.S., Eurozone, Japan and the United Kingdom and other mature economies , high economic growth boost incomes and rising demand for raw materials, thus promoting inflation.

It should be noted that, similar to China, food price inflation in many countries become the main driving force. Food prices in China in November rose by 11.7%; Brazil November food prices are up 2.22%, the highest level in 8 years.

“In the path of urbanization and industrialization, the agricultural prices are not the people’s will. China and many emerging economies, the composition of CPI, food prices accounted for higher prices is a normal situation.” Chinese Academy of Social Sciences Competitive Selection Finance Institute, told reporters.

Gengrang headache is that emerging economies, the United States makes the world’s second quantitative easing liquidity faced the threat of flooding. European and American economic downturn and reduce the chances of making the capital investment to accelerate the flow of the East from the West, hot money inflows are increasing in emerging economies, the risk of inflation and asset bubbles.

According to Goldman Sachs survey, is now the major emerging economies into the international hot money, including speed and scale are more than before the financial crisis. April 2009 to June of this year, the international net assets of 575 billion U.S. dollars annually into the emerging economies of scale. Among them, the Asian countries to attract international capital amount of up to first half of 2010 into the emerging economies, international capital flows to Asian countries were 78.6%.

This makes a lot of emerging markets into a difficult choice “dilemma” dilemma – on the one hand, to maintain moderate growth in the domestic economy, on the other hand, imported inflation pressures have led many countries again and again to start plus information. This year in November, the Indian central bank announced interest rate increase this year, the 6th, the benchmark interest rate by 25 basis points to 6.25%, to balance economic growth and curb price rises.

However, interest rates will make the currency appreciation and increasing the pressure of hot money inflows. China’s central bank announced on the 10th the sixth year raised the deposit reserve ratio, rather than the market had widely expected interest rate increase, it is this “dilemma” of visual expression. Growth and how to strike a balance between inflation, has become a global issue.

Compared to the “BRIC” the other three countries concerned, as a resource input-oriented country, China’s great demand for resources, different ways of economic development, population pressure, the rise in international commodity prices and international capital flows on China’s domestic greater impact on inflationary pressures.

Response to the current excess liquidity in China, the focus lies in the internal economic balance. Attention should focus on restructuring the current balance of investment and savings, the economy should focus on the possibility of overheating from relatively fast shift; as an inevitable trend to curb hot money inflows, as a symmetry control measures, China or to strengthen supervision of capital inflows at the same time, and gradually relax control on capital outflows, financial institutions and residents to encourage increased foreign investment, and actively promote the internationalization of the RMB.

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