JP Morgan: China Expects To Raise Interest Rates For The First Time In The Third Quarter.

Wang Qian, chief economist at JP Morgan, said at the China media conference today that China expects to raise interest rates for the first time in the third quarter, and will raise interest rates by two basis points in 2010. Morgan chase is expected to raise interest rates for the first time in 5/6 months, and there will be three interest rates raised in advance.

And the reason for the expected time to raise interest rates is that Wang Qian's analysis says that under the control of the risk of overheated economy, the broad consumer price index continues to rise, which the Chinese government can tolerate at the moment.

Moreover, the recent decline in global commodity prices should help to alleviate some of China's inflationary pressures to a certain extent.

Wang Qian believes that the overheated risk of China's economy has now been relieved. But in view of the uncertain global and domestic economic prospects, the Chinese government has also indicated that 2010 is the most complicated year after 2009's "most difficult year", and that prudent and relatively loose monetary policy should be maintained in 2010 and fiscal stimulus measures should continue.

"We think the Chinese government will raise the policy interest rate and allow RMB appreciation in May or June," Wang Qian said in an interview with NetEase finance after the meeting.

According to Wang Qian analysis, there are signs that the Chinese government is more worried about the prospects of China's export industry because of the tightening policy before slowing domestic demand. For this reason, Wang Qian predicts that the Chinese government will postpone the interest rate increase in the third quarter, and the one-year lending rate will reach 5.58% at the end of the year.

But Wang Qian further said that raising interest rates does not mean contraction, but rather back the normal surplus liquidity released last year.