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Inflation Concerns Add Uncertainty

NewsChina, Chinese Edition July 12, 2021

By NewsChina Updated Sept.1

The world is teetering on the brink of global inflation. In May, the Producer Price Index and Consumer Price Index in the US saw the larg- est year-on-year growth for a decade. The expansion in the US Federal Reserve balance sheet has led to explosive rises in commodity prices, US equity and real estate valuations. China faces severe pressure from imported inflation because of the influence of international factors. There is also a potential gray rhino looming for the Chinese economy at the end of this year or early next year. From raw materials to fin- ished products, the production chain of the Chinese home appliance sector is in an awkward situation due to weak bargaining ability as it endures a new round of commodity price hikes. In addition, higher shipping costs pushed up price inflation, increasing the uncertainty around the global economic recovery. Systemic solutions are needed to cope with imported inflation but monetary policies coupled with fiscal expenditure alone will not make a difference.