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China’s Inflation Muddle

BEIJING – Even as the debt crises in Europe and the United States loom large and the global economic recovery falters, inflation is making a comeback worldwide. Indeed, emerging-market economies are bracing for a serious bout of it – together with the dire political consequences that it will bring.

China’s headline consumer price index (CPI) jumped 6.4% year on year in June, reaching its highest level since July 2008. Against the background of a shaky global recovery, concerns have grown considerably over a possible hard landing for the Chinese economy, caused by monetary tightening aimed at controlling inflation.