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China's Production Shrinks as CPI Slows
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The People�s Bank of China used to be committed to cap accelerating inflation. Now, however, it witnesses the slowing CPI growth.


According to the latest data released by China�s National Bureau of Statistics , in July inflation decreased to its lowest reading over the last 30 months - 1.8%.


A low CPI provides scope for more stimulus measures. And as investors are waiting for new steps, demand for raw materials such as crude oil is augmenting.


A barrel of light WTI oil grew in price to the level of 93 US dollars 80 cent on the upbeat news.


Yet, there is a restrictive effect stemming from the report on China�s industrial production for July.


Industrial output in China fell to 9.2% on an annual basis, even though the forecast was right the opposite: economists had expected upturn in the sector to 9.8%. Last time such disappointing data was unveiled was in May 2009. It is pretty clear that this quarter China�s GDP will hardly improve from 7.6%.

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