Why China must brace for rocketing consumer goods, housing prices

Nomura predicts home prices will be "hot issue".

According to Nomura, the official non-manufacturing PMI rose marginally to 56.2 in January from 56.1 in December. New orders declined to 53.7 from 54.3, which casts doubt on the strength of the recovery in the service sector. Input prices rose sharply to 58.2 from 53.8.

The Chinese Index Academy, a private research institute, announced housing prices rose by 1% m-o-m in January in the 100 cities that they track. The pace of housing price inflation picked up quickly – in December housing prices rose by 0.2% m-o-m.

Here's more from Nomura:

We maintain our view that the government cannot maintain loose monetary policy in 2013 as inflationary pressures continue to build up. Prices for consumer goods and housing will likely rise further in February due to the Chinese New Year effect.

We expect housing prices to be a hot issue under debate at the National People's Congress in March. We see an increasing likelihood that the government may introduce new measures to contain housing price inflation.