For example, while China has been intermittently raising bank lending and deposit rates as well as the reserve requirement ratio since the beginning of 2011, year-on-year growth in the consumer price index (CPI) has remained high, at 5.5 percent in May, 6.4 percent in June, 6.5 percent in July, and 6.2 percent in August.
Whether the Chinese economy can make a soft landing will be critical in ensuring the sound development of the global economy, and therefore, developments in China continue to warrant close attention. Besides the problem of inflation, it should be noted that there is a risk in China that part of the large-scale investment made through local government investment vehicles might become nonperforming.