With unemployment in China rising, economic stimulus is urgently needed. But Premier Li Keqiang has been wise to highlight the importance of not overdoing it.
Governor of the People's Bank of China, Yi Gang. Credit: IMF/Ruan Rayburn via Flickr
When high levels of capital investment spending fueled a sustained increase in Chinese inflation from 1991 to 2011, the authorities quickly brought the situation under control, and over the last decade, CPI has rarely exceeded 2%, compared to 5.4% in 2011. With policymakers in most major economies now losing their grip on price stability, can China continue to keep a lid on inflation this year and next?
To answer this question, it is worth considering how China succeeded in curbing inflation for the past decade. Notably, the government refrained from new rounds of large fiscal and monetary stimulus, and thanks to the central bank’s increased autonomy, money creation and credit growth stopped passively catering to investment projects from below.
After 2015, China’s central bank adopted a prudent tone and adjusted credit allocation to support sectors with excessive debt ratios. Highly polluting industries and the real-estate sector â
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When China announced it was ending quarantine requirements for incoming travelers, Chinese people collectively picked up their phones to search popular travel apps like Ctrip and Qunar. Owned by travel giant Trip.com, these apps helped Chinese travelers explore the world pre-pandemic and facilitated the human-to-human interactions that drove China's rise. But many of today's travelers seem to be sticking closer to home, and their hesitation to get back to the jetsetting habits of the past 20 years has far-reaching implications — especially for Trip.com.
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