O'Neill: Chinese inflation 'not a problem' as growth cools

Inflation will not be a serious problem in China in the second half of this year as the economy begins to cool, said Goldman Sachs' Jim O'Neill.

The chairman of Goldman Sachs Asset Management, who oversees £414bn of assets, said the Chinese authorities will stop tightening policies as price gains moderate, Bloomberg reports. He also expects country's GDP growth will pull back from 9.7% in first quarter from the previous year to 8% from June to December 2011. “China’s economy is probably slowing down more than people realise,” O’Neill said. He added the Chinese equity market is set for a “big rally” in the second half of the year if his prediction is correct, according to Bloomberg. Inflation stayed above 5% for a second ...