Why the next ten days could be crucial for China's 2012

Liontrust's Eoghan Flanagan has urged Chinese policymakers to accelerate monetary easing by the end of the year in order to help boost a slowing economy.

Chinese policymakers cut bank reserve requirements for the first time in three years on 30 November, by 50 basis points to 21%, heightening expectations of further easing in the near future. Manufacturing data for the country released after that date has appeared to confirm a slowdown in economic activity. HSBC's December purchasing managers' index showed activity had picked up from November but remained at contractionary levels. "Our view is for People's Bank of China to ease further by cutting reserve ratio requirements before the end of January and a total of four 50bp cuts in 2012...