Mixed signs in Asia, with a view to the risk of stagnant inflation in China

Stock indexes in the Asia-Pacific region showed mixed signs on Monday, after the relatively downward trends on Wall Street last week, although the Nasdaq reached 16,000 points for the first time in its history.

On the board, the Japanese Nikkei strengthened by 0.09%, to 29,774.11 points, with the South Korean KOSPI to record gains of 1.42%, while in Hong Kong o Hang Seng declines by 0.42%. In mainland China, the Shanghai gains 0.61% and o Shenzen, stronger, 1.41%. In Taiwan, the Taiwan Weighted “lost” 0.08%, while in Australia the S&P/ASX 200 closed with losses of 0.59%.

The deteriorating situation with coronavirus cases in the US, Europe and other regions around the world seems to be exacerbating the investment climate. Comments by advisers to the People’s Bank of China (PBOC) on the risk of “stagnant inflation” at the same time reinforce fears of inflationary pressures.

The emphasis of the People’s Bank of China is on reducing the risks of excessive lending by real estate companies, without, however, putting a brake on the growth of the economy.

PBOC adviser Liu Shijin told a conference on the weekend that China should avoid “semi-stagflation”, according to Bloomberg.

Another economist, Jia Kang, moved in the same direction, saying that if growth is below inflation, then it will be difficult to draw up a recipe for long-term control of macroeconomic variables.

Nomura’s Ting Lu, on the other hand, notes that attempts to reduce real estate lending, the new COVID-19 waves and the tough measures being taken to address them, coupled with rising prices, pose new challenges for Chinese government.

“A collection of data from meetings, conferences and official policy documents shows that Beijing is increasingly concerned and has begun to make the necessary adjustments so that growth does not fall to even lower levels,” the report said. of Ting.