{"id":378489,"date":"2010-03-02T01:49:21","date_gmt":"2010-03-02T06:49:21","guid":{"rendered":"http:\/\/blogs.wsj.com\/economics\/2010\/03\/02\/china-bank-chief-sees-low-global-inflation\/"},"modified":"2010-03-02T01:49:21","modified_gmt":"2010-03-02T06:49:21","slug":"china-bank-chief-sees-low-global-inflation","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/378489","title":{"rendered":"China Bank Chief Sees Low Global Inflation"},"content":{"rendered":"

From the WSJ\u0092s China Real Time Report <\/a>blog:<\/em>
\nChina\u0092s chief banking regulator sees little chance of high inflation world-wide, even as his country\u0092s own policymakers are pulling back from stimulus policies to avoid a surge in domestic prices.<\/p>\n

Growth in the developed world remains weak and the recovery is likely to be slow, which will balance any pressure on global commodity prices from China\u0092s own rapid growth, argues Liu Mingkang, the respected U.K.-educated chairman of the China Banking Regulatory Commission. He made the comments in an interview with Seeking Truth, a Communist Party magazine. (The full text of the interview is available in Chinese here)<\/p>\n

\u0093The global economic recovery will be a slow, complex and winding process,\u0094 Liu said, ticking off a long list of problems: high unemployment in developed countries; an international financial system that is still decreasing leverage and disposing of bad assets, and an overhang of excess capacity.<\/p>\n

\u0093Given this kind of background, global liquidity while relatively flush is not likely to generate significant global inflation,\u0094 Liu said.<\/p>\n

The extraordinarily loose monetary policy in most major economies has made it easier for investors to put money into commodity markets, Liu said, but that impact on prices is most likely transitory. \u0093Expectations of the depreciation of the U.S. dollar and various kinds of speculation may for a period of time raise the price of certain commodities, but it is difficult to imagine that this kind of rise will become a long-term trend,\u0094 he said.
\nAnd in any case the world\u0092s current super-loose monetary policies can\u0092t and won\u0092t be a permanent feature of the markets. Liu doesn\u0092t think there will be a \u0093substantive withdrawal\u0094 of stimulus policies in the developed world anytime soon.<\/p>\n

\u0093But with the gradual improvement in economic fundamentals, as well as increasing pressure on public debt, stimulus policies will sooner or later have to be withdrawn, so there will be significantly less liquidity to drive continued increases in commodity prices,\u0094 Liu said.<\/p>\n

Wait, you say, aren\u0092t global commodity prices these days driven by China\u0092s demand, which is growing much faster than in rich countries? Not necessarily, Liu argues.
\n\u0093The fast growth in China, India and other emerging market economies will increase demand for commodities, but in terms of absolute amounts, developed economies are still the major consumers of commodities,\u0094 Liu said.<\/p>\n

\u0093In a situation where developed economies are recovering slowly, there is no pressure on global commodity prices to rise.\u0094<\/p>\n

– Andrew Batson<\/p>\n

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From the WSJ\u0092s China Real Time Report blog: China\u0092s chief banking regulator sees little chance of high inflation world-wide, even as his country\u0092s own policymakers are pulling back from stimulus policies to avoid a surge in domestic prices. Growth in the developed world remains weak and the recovery is likely to be slow, which will […]<\/p>\n","protected":false},"author":850,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-378489","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/378489","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/850"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=378489"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/378489\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=378489"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=378489"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=378489"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}