The Chinese economy could see a risk of ‘near-stagflation’

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Liu Shijin, adviser to the People’s Bank of China (PBoC), warned on Monday that the Chinese economy could enter a period of “quasi-stagflation”.

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“The Chinese economy could enter a period of” quasi-stagflation ” with relatively slow growth and excessively high inflation of producer prices “.

“Such a scenario is”very likely“If demand remains weak, producer prices remain high, corporate profits are squeezed, and existing risks in the economy are” released too quickly. “

“This possibility needs close attention. If it happens it will last until 2022.”

Meanwhile, Reuters reports that “a reading between the lines of the PBoC’s latest quarterly monetary policy report suggests that China’s central bank is apparently leaning toward easing“.

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