Interesting Chinese PPI (Producer Price Inflation) data-and what could be behind it

First of all , if we consider the sensitiveness  of the Chinese export/investment sector to the availability of cheap loans, then the most important data is the interest rate vs. PPI.

It was negative during the bust- at that time many Chinese manufacturer went out from the business.

Now it is positive, however peaked

Interesting the connection with the US trade deific.

 

What could it mean?

 

The Chinese inflation is driven by the interest rate-from one side.

And since 2006 the Government flooded the market with cheap investment loans, just to keep the economy on track.

 

The PPI went down when the US deficit peaked- and during the 2008 downturn.

 

I assume that there is a strong connection between the PPI-interest rate spread, the profitability of the enterprises and the Chinese housing market (the mayor part of the money end in the housing market- the investment financed with 100% loans, so there is no place for the earned money)

 

Intereting.