Too much stimulus in the U.S. may bring ‘imported inflation’ to China, economists warn
Jason Lee | Reuters
BEIJING — As the U.S. pumps trillions of dollars into its economy in the wake of the coronavirus pandemic, economists are concerned about spillover effects in China, including the risk of “imported inflation.”
Worries about high inflation, or rapidly rising prices, hit U.S. markets last week. The U.S. Congress is reviewing a $1.9 trillion stimulus plan that critics say could cause inflation to soar, and add to debt levels that rose following last year’s historic $2 trillion stimulus package.
In China, economists are wary of risks to growth as the country tries to recover fully from the shock of the pandemic.
“The large-scale issuance of U.S. Treasurys, and the rapid expansion of the Federal Reserve (balance sheet), have increased the spillover effect of U.S. macro policies,” former finance minister Lou Jiwei said in an article published in …continued .
[Source: CNBC News]