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China Braces for Global Inflation

21st Century Business Review December 8, 2022

By NewsChina Updated Mar.1

Amid the US Federal Reserve’s continuous interest rate increases, energy price hikes caused by the Russia-Ukraine war and the Covid-19 pandemic, China will face the challenges both of global inflation and domestic deflation. The People’s Bank of China (PBoC) has adopted tight monetary policy and hiked interest rates at a unprecedented speed and scale to stabilize inflation expectations. Meanwhile, the policy is adopted prudently in a bid to contain nationwide deflation. To revitalize sluggish consumption demand, economic growth is of paramount importance. The PBoC will continue to balance between GDP growth and growth in debts and loans, keep a stable leverage ratio and remain prudent in adjusting interest rates and required reserve ratios. Despite disputes, China is negotiating with the US and Europe for further trade cooperation to ensure an effective global supply chain.