China’s Inflation Risk See Share market Retreat by 20%

China’s share market retreated, which see them now in bear market territory after falling 21% from November, on concern interest rates will rise to fight inflation and soaring housing prices.

China’s consumer prices rose 2.8% in April, the fastest pace in 18 months, and property prices jumped 12.8%.

The People’s Bank of China has ordered bankers to set aside more reserves for outstanding loans. The government recently banned loans for third home purchases and raised mortgage rates and deposit requirements for second home purchases in an attempt to stem rising house prices.