China Must Reform CPI Calculation Methodology, Researcher Writes in Daily

China must reform the way it compiles the consumer price index as its focus on food prices doesn’t tell the real tale about inflation, Yi Xianrong, a researcher at the Institute of Finance and Banking of the Chinese Academy of Social Sciences, wrote in a commentary in the China Daily.

The effects of excessive credit growth in the country is “inestimable,” Yi wrote. Increases in asset prices over the past year will increase the cost of labor and fuel higher inflation, Yi said in the commentary.

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