Asia

As Chinese trade volume is expected to grow an amazing 146% in 14 years’ time.

It's time to scrap those thoughts of a hard landing in China as trade surplus for July and August totaled a whopping US$48.2b.

Yet concerns on pay inflation in Asia resulting from rapid growth, leadership shortages and inflation surface.

However, inflation pressures are still lurking as August core inflation reached a two-year high of 5.2% y-o-y.

The country’s economy has slowed a little more as private consumption growth eased to 6.3% from 8% in 1Q11.

Standard Chartered expects core inflation to trend higher as housing costs rise.

Economic uncertainties and tightened credit line tame appetite for risk.

The country’s GDP is forecast to grow by 8.8% in 2H2011, as slower growth will be inevitable for China but supported by resilient domestic demand.

As price pressures broadened to housing, furnishing, recreation and education segments.

DBS expects the country’s inflation to fall below 5% for the remaining months of the year as commodity prices have eaed in recent months.

The country’s economy defied expectations as export volumes rose 20% YoY, contrary to the 2.5% drop pencilled in by market analysts.

However, underlying price pressures will likely remain high, making it difficult for inflation to fall below the 4% mark in the remaining months of this year.

This is a bit better than August’s 49.91, as the slowdown in China's manufacturing sector is showing signs of stabilizing.

DBS says manufacturing sector growth has softened as a result of weaker export demand.

As motor vehicle production improved this month, followed by a pick up in the food and petroleum sectors.

DBS blames the effects from the earlier arrival of the Chuseok holiday for the decline in exports.