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China sacrifices growth to satiate inflation dragon; China has a shrinking labor force
http://www.reuters.com/article/2012/03/11/us-china-economy-inflation-idUSBRE82A02S20120311China sacrifices growth to satiate inflation dragon
By Nick Edwards
BEIJING | Sun Mar 11, 2012 3:31am EDT
(Reuters) - If inflation is a dragon that must be slain, China's Premier Wen Jiabao has shown he is willing to sacrifice a part of the country's most vital asset to do so -- growth.
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China has a shrinking labor force, mandated double digit wage hikes, an export sector losing its competitive cost advantage and an insatiable thirst for raw material imports.
"With China's working-age population set to decline steadily from 2012 onward due to retirement, the notion that a minimum of 8 percent GDP growth is necessary to sustain full employment and preserve social stability is now outdated," analysts at Nomura said in a note to clients.
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