China's inflation climbed record highs in the last two months, rising 5.6 percent in July and 6.5 percent in August.

 

Some securities research institutes calculated that inflation would continue.

 

In a recent report Guotai Juan Securities predicted that this round of inflation may continue into the year 2009.

 

"The current price rise is more driven by rising costs than by demands," said Li Huiyong, an analyst with Shenyin and Wanguo Securities.

 

Potential rises in resource prices, agricultural products and labor costs will continue to keep the inflation index at a high level, he said.

 

However, inflation will facilitate the development of the domestic capital market as current monetary policies still lag behind the real interest rate, Guotai Jun'an Securities said.

 

For more details, please read the full story in Chinese (http://www.cs.com.cn/xwzx/02/200709/t20070914_1194029.htm).

 

(China.org.cn September 14, 2007)