China | China’s role in global inflation: stabilizer or contributor?

We analyze whether China exports inflation to the world and conclude that the answer is not in the short term since the pandemic outbreak but China will contribute to global inflation in the long term.

Key points

• Key points:
• The historical high inflation becomes the prime risk of the global economy, but is China aside?
• Evidence shows that China has not exported inflation to the world in the short term since the pandemic outbreak.
• For the medium term of 1-3 years, the answer is not as well as China reverted back to "old growth engines" such as exports to stimulate growth indicating a competitive price.
• For the long term, among all the positive and negative factors, China's new growth model decides that China tends to export inflation or at least not to export deflation as of the past decades.

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