Inflation in China is likely to have risen by 6.1 percent to 6.3 percent year over year in the month of August, according to the official Xinhua news agency. This would mean that inflation peaked in July when prices rose by 6.5 percent, a three-year high.

China’s top economic planning body, the National Development and Reform Commission (NDRC), said that there’s no need for “panic” about rising debt levels at local government financing vehicles. In a question and answer session on the NDRC’s website, officials said that China is unlikely to see a default in government debt and that total debts held by central and local government are less than 50 percent of gross domestic product. A report by China’s audit office in June found that outstanding debt from local government financing vehicles came in at RMB10.7 trillion (USD1.7 trillion) and a subsequent report by Moody’s suggested that the figure could be higher. China’s local governments are unable to directly sell bonds or take bank loans and must set up financing vehicles to fund infrastructure projects. In April, Standard & Poor’s estimated that up to 30 percent of lending to local government financing vehicles could go sour.

Manufacturing activity continued to contract in Taiwan at their sharpest rate since January 2009. The HSBC Taiwan Purchasing Managers’ Index for August declined to 45.2 from 46.1 the previous month. Readings above 50 signal an expansion of manufacturing activity. Export orders from the EU fell sharply while orders from the US and China also declined. HSBC economists said that the fiscal problems in the West had become “an increasingly heavy burden for exporters to bear” although Taiwan’s job creation is holding steady.

 India’s July merchandise exports rose 82 percent year over year to USD29.3 million, according to data from the country’s Ministry of Commerce. However, analysts said that India will be unlikely to sustain this rate of export growth due to global economic conditions and monetary policy tightening by the Reserve Bank of India. July’s imports rose 52 percent to USD40.4 billion, on the back of a 58 percent boost in non-oil imports. Oil imports rose by 37 percent. The country’s trade deficit for the month increased to USD11.1 billion from USD10.5 billion the previous year. Exports from April to July—the first four months of India’s fiscal year—rose 54 percent to USD108.4 billion.