As expected, China’s central bank has raised its benchmark interest rates before the end of the year. Its one-year lending rate goes up by a quarter of a percentage point to 5.81% from 5.56%, effective Dec. 26th. The corresponding deposit rate rises to 2.75% from 2.50%. It is the second rate rise in as many months and another turn of the screw in the fight against inflation. We expect to see more rate rises in 2011 to push up the price of credit as well as more quantitative measures to reduce its supply. Yesterday, Hu Xiaolian, a deputy governor at the People’s Bank of China told a meeting of bankers that China “should maintain a reasonable and moderate credit growth next year that is in line with the country’s goal in economic development and inflation control”.