Source: The Wall Street Journal Asia                Date: 12 November, 2010

China's consumer price index rose 4.4%, and the country ordered its major lenders to park more cash at the central bank, showing its renewed concern about inflation. The move came Wednesday just after China reported its second-largest monthly trade surplus this year. China and some other emerging markets are increasingly concerned that their strong economic rebound from last year's global slowdown will result in inflation and asset bubbles, while the U.S. and other developed economies are expanding weakly if at all.

Requiring banks to keep more money at the central bank will drain funds from the financial system, helping relieve some of the inflationary pressures. Those policies have led to some moderation in China's growth, and China's Customs agency reported separately Wednesday that the nation's merchandise trade surplus rose to USD27.15 billion in October from USD16.9 billion in September, as imports, particularly of commodities, cooled down. China was running much smaller surpluses earlier this year, when imports were growing by more than 50%, but its trade surplus started to grow again in May as those gains tailed off.