Meanwhile, the report predicts the global economy to grow 3.1 percent both this year and next, when tight monetary policy and financial conditions may persist to tackle inflationary pressures.
Steven Barnett, senior resident representative of the International Monetary Fund in China, said the country has the scope to boost the economy despite real estate headwinds by reorienting fiscal stimulus to consumer spending and implementing further monetary accommodation given the lack of inflationary pressure.
While China faces real estate headwinds, it has the scope to boost the economy by reorienting fiscal stimulus to consumer spending and implementing further monetary accommodation given the lack of inflationary pressure, Barnett said.
Given the lack of inflationary pressure, the People's Bank of China has some room to ease," the IMF said.
However, due to the rapid decline in US inflation since the second quarter, some inflationary pressure has been released, and it may not be that obvious as the marginal support effect of excess savings on consumption is hedged by the decline in inflation.
China's producer price index, which measures costs for goods at the factory gate, is still posting negative growth at a time when the West is generally experiencing considerable inflationary pressure.
JACKSON HOLE, Wyoming -The United States' economic growth, still racing at an inflationary pace while other key parts of the world slow down, could pose global risks if it forces Federal Reserve officials to raise interest rates higher than currently expected.
In the face of huge inflationary pressure, European and American companies are more cautious in their approach to the challenge, preferring to replace cheaper raw materials and increase marketing investment and other short-term market strategies.
The current challenges, such as an economic downturn, inflationary pressures, lack of geopolitical cohesion, and lingering impacts of the pandemic cannot be resolved by any single country, said Prime Minister of Vietnam Pham Minh Chinh.
In contrast to inflationary pressures faced by major economies such as the United States, China's inflation is at a relatively low level, leaving room for the government to step up necessary macroeconomic policy support in the coming months, experts said.
Despite facing uncertainties from international geopolitical tensions and imported inflationary pressures, he said China has the confidence and capabilities to achieve its 2023 annual consumer inflation target of around 3 percent, given its sufficient supplies of products such as grain, hogs and energy as well as its improved system for stabilizing supplies and prices.
Against that background, China, the world's second-largest economy, has managed to deal with inflationary pressures with the government's effective measures to stabilize prices and supplies of daily necessities and bulk commodities.
Considering China's abundant labor force and their strong willingness to dedicate their efforts to work, Xing said the recovery in consumption of services will not add too many inflationary pressures.
He added that inflation is expected to remain mild this year and overall inflationary pressure is manageable.
The US Federal Reserve's interest rate hikes are still ongoing and policymakers need to be vigilant on domestic inflationary pressure," said Wen Bin, chief economist at China Minsheng Bank.
But in general, many factors including negative export growth can greatly undermine inflationary pressure.
When it comes to inflationary pressures amid a gradual recovery in demand, Xing said he believes inflation will not be a major concern this year, and the country may set a target of around 3 percent annual consumer inflation in 2023.
Despite facing inflationary pressures amid the robust recovery of domestic demand and high prices of energy and raw materials, they said they believe China will keep prices stable within a reasonable range this year, given its sufficient supply of daily necessities and the government's effective measures to maintain price stability.
Monetary policy accommodation is necessary amid muted inflationary pressure, he added.
However, should COVID-19 containment adjustments lead to a faster-than-expected rise in demand and inflationary pressure, monetary policy will need to adapt quickly.
Last year, a number of developed economies, including the United Kingdom and the United States, experienced inflationary whiplash.
China has managed to deal with imported inflationary pressures with effective measures focused on stabilizing prices of products essential for people's livelihood as well as bulk commodities.
While warning of headwinds from imported inflationary pressures and potential fluctuations in commodity prices, Wan Jinsong, director of the NDRC's Department of Price, said China has solid foundations as well as the confidence and capabilities to maintain overall price stability in 2023.
Facing fierce competition from Southeast Asian countries, high energy prices and surging inflationary pressure in the US and Europe, China must step up its efforts to stabilize foreign trade and avoid a decline in foreign trade growth, said Lian.
China has favorable conditions and capabilities to maintain overall price stability in 2023 despite imported inflationary pressures and potential fluctuations in high international commodity prices, officials and experts said on Thursday.
China has the confidence, conditions and capabilities to keep overall prices stable in 2023 despite challenges from the high and volatile international commodity prices and imported inflationary pressures, the country's top economic regulator said on Thursday.
While China may still face challenges such as supply chain disruption by the pandemic and emerging inflationary pressure in 2023, Yu said he believed that the world's second-largest economy will gradually return to a decent growth trajectory in line with its potential.
"Facing global inflationary pressures at the highest in 40 years, China's inflation has remained at a relatively moderate level," said Wen Bin, chief economist at China Minsheng Bank.
Looking into 2023, Wen said inflation will continue to rise modestly with imported inflationary pressures easing and a pick-up in social demand.
"Since the US imposed tariffs on $360 billion worth of Chinese goods under the US Section 301 in 2018, it has not only severely damaged normal economic and trade exchanges between China and the US, but it also put more costs and inflationary pressure on US manufacturers, workers and consumers, and led to unfair competition," he said.
Thanks to prompt policy adjustments, China has kept the economy stable and preserved price stability at home despite surging inflationary pressures worldwide, he said.
The NBS attributed the easing in inflationary pressure to a higher comparison base, rising supplies of vegetables, fruits and aquatic products, and softer consumer demand after the National Day holiday, which ended in early October.
Experts said the falling CPI and PPI readings have painted a picture of subdued inflationary pressure in China while many major economies, such as the United States and the eurozone, are still raising interest rates to curb lingering high inflation.
This adoption and innovation have made significant contributions to stabilizing the global supply chain and alleviating global inflationary pressures.
Zhou said the steady declines in factory-gate price inflation will provide a buffer for some midstream and downstream enterprises struggling with high input costs and imported inflationary pressure.
Citing challenges from monetary tightening in developed economies and inflationary pressures around the globe, Sang said he expects to see further fiscal and monetary easing to stimulate China's slowing economy in the remainder of the year.
Fu Linghui, a spokesman for the NBS, said at a recent news conference in Beijing that despite facing rising inflationary pressure, China still enjoys many favorable conditions to keep overall prices stable for the rest of the year.
Due to imported inflationary pressure, a seasonal rise in pork prices and the low base effect in the same period of last year, the CPI may be slightly higher in the latter months of this year and the first quarter of next year, compared with the preceding months, Yang added.
- China is capable of keeping overall prices in a reasonable range despite soaring inflationary pressures worldwide and fluctuations in food prices in the near term, officials and analysts said.
Echoing the view, Fu noted that the imported inflationary pressures are expected to ease due to the slowing global economic recovery, tightening monetary policies in major economies, and the fall in commodities prices globally.
Fu Linghui, a spokesman for the National Bureau of Statistics (NBS), said at a recent news conference in Beijing that despite facing rising inflationary pressure, China still enjoys many favorable conditions to keep overall prices stable for the rest of the year.
When it comes to imported inflationary pressure, Fu said the impact of import factors will likely ease given monetary tightening among major economies and slower growth in international commodity prices.
Despite facing structural inflationary pressure amid elevated global inflation, Feng said the CPI will likely rise mildly in the following month as there is limited room for further food price gains, and growth in industrial products prices may slow amid fears over a gloomy global economic outlook.
The PBOC said China may face mounting inflationary pressure at home due to factors including a recovery in consumer demand, rising pork prices and high energy and raw material costs, and imported inflationary pressure will continue to exist.
Ye warned of pressure from soaring pork prices and imported inflationary pressure from rising global energy and food prices, saying China's CPI may rise at a faster pace than the level in the first half, and the CPI may grow above 3 percent in some months.
A report released on Wednesday by the People's Bank of China said China may face mounting inflationary pressure at home due to factors including a recovery in consumer demand, rising pork prices and high energy and raw material costs, and imported inflationary pressures will continue to exist.
Even though China is facing inflationary pressure from soaring pork prices in the coming months, Wen said the government's recent moves to stabilize supplies and prices will help ensure market orderliness.
Even though facing imported inflationary pressure, China, supported by its ongoing industrial transformation and upgrading, will continue to work toward stabilizing the global supply chain, said Wei Qijia, a researcher at the Economic Forecasting Department of the State Information Center.
Extremely loose monetary policies have added to inflationary pressure.
Instead, it will infuse instability into the global financial markets, accelerate the flow of capital and the fluctuations of exchange rates, spill over the risks and thus pose new challenges to unimpeded global industrial supply chains and efforts to lower inflationary expectations.
Finally, China should accelerate the implementation of proactive fiscal policy and make good use of various types of monetary policy instruments to coordinate with its fiscal policy and to reduce spillover effects from the US Federal Reserve's monetary tightening and imported inflationary pressure on China.
As imported inflationary pressures are relatively high, it is a hard-won achievement to keep the price rise within a moderate range, Fu said.
Zhu warned that industrial firms are facing multiple challenges from resurgent domestic COVID-19 cases and intensifying imported inflationary pressure, adding that more efforts should be made to ensure stable prices and supplies as well as smoother logistics services.
Li Qilin, chief economist at Shanghai-listed Hongta Securities, warned of mounting pressure from domestic COVID-19 cases and imported inflationary pressure.
However, Zhu warned that industrial firms are facing multiple challenges from the resurgent domestic COVID-19 cases and intensifying imported inflationary pressures, saying more efforts should be made to ensure stable prices and supplies as well as smooth logistics services.
He added that the decision to reduce the ratio by 0.25 percentage point, rather than the more common 0.5 percentage point, reflects the prudence of monetary policy in the face of rising imported inflationary pressure and the US Federal Reserve's fast tightening.
Okonjo-Iweala called on governments and multilateral organizations to work together to facilitate trade at a time of sharp inflationary pressures on essential supplies and growing pressures on supply chains.
Yu Yongding, a senior economist at the Chinese Academy of Social Sciences, said China should stick with a fairly expansionary monetary policy to ensure the stabilization of growth, in spite of overseas central banks' interest rate hikes and potentially higher inflationary pressure.
If inflationary pressure worsens amid restrictions on the global commodity supply, responsive measures other than monetary policy should be taken, as tightening monetary policy in such circumstances risks triggering deflation, said Yu, who is also a former member of the PBOC's monetary policy committee.
They said reinstating tariff exclusions on Chinese goods will help the US deal with rising inflationary pressure, reduce costs within global supply chains and benefit enterprises and consumers from both sides.
"Noting that the list includes consumer goods and industrial products, Xu Hongcai, deputy director of the China Association of Policy Science's economic policy committee, said the move will help the US alleviate high inflationary pressure.
"The global economy is facing multiple pressures from COVID-19, high inflationary pressures and geopolitical tensions," Luo said.
"For the US side, the exemptions will help lower prices of imported goods and thus ease inflationary pressure.
"Considering that the exemptions are part of a larger US drive to dampen inflationary pressure, Wang expects to see more steps to bring bilateral economic trade ties back to normal.
At present, the US is facing severe inflationary pressure, and the inflation level will exceed the target range in the next two years, which is exactly the basis for the rate hike move.
Judging from the labor market, the unemployment rate in the US is expected to reach 3.5 percent by the end of this year－close to full employment－which may form a wretched cycle of higher wages and larger inflationary pressure.
"It also noted that recent articles have highlighted that the tariffs are having a modest but real impact on inflationary pressures.
On the other, they must keep an eye on CPI, the inflationary expectation," said Hu, also a former vice-governor of People's Bank of China, China's central bank.
Experts nevertheless remain wary of any unexpected worsening of geopolitical tensions that could significantly exacerbate inflationary pressure facing China and curtail the monetary policy in supporting the economy.
Facing mounting inflationary pressures worldwide, China has contributed by balancing supply and demand in the international market and stabilizing the global price level, amid efforts to stabilize domestic prices, Liu noted.
Wen Bin, chief analyst at China Minsheng Bank, said that China should continue to ensure supply and stabilize prices of bulk commodities, cope with imported inflationary pressures and stimulate strong domestic market potential.
At the national level, she said, policies should remain tailored to country-specific circumstances including the extent of recovery, underlying inflationary pressures and available policy space.
The World Bank noted various downside risks are clouding the outlook, including simultaneous Omicron-driven economic disruptions, further supply bottlenecks, inflationary concerns, financial stress, climate-related disasters and a weakening of long-term growth drivers.
If the renminbi depreciates, trade frictions may intensify and import prices may go up, which will exert greater inflationary pressure in China.
"Overall, conditions of the manufacturing sector brightened in December as supply and demand improved while inflationary pressure eased," said Wang Zhe, senior economist at Caixin Insight Group.
The ongoing COVID-19 pandemic has brought about changes to the macroeconomic system of each country and also that of the globe: Inflationary pressure is showing signs of abating while deflation is being seen in parts of the world where money supplies are tightening; low interest rates, even negative rates in some places, are beginning to spread; volatility of economic growth has decreased; deficits and debt have become long-term issues; government bond markets have become a major focus within fiscal and monetary policies; amid calls for de-globalization, countries are slowly weakening transnational economic ties … All these changes are posing challenges to traditional macroeconomic theories and the expert analyses written about global economic and trade issues.
China's overall price levels are within a reasonable range despite rising global inflationary pressure, as China's consumer price index rose 0.9 percent in the first 11 months, much lower than the figures of major economies, Meng said.
Some developed nations, represented by the United States, is facing unprecedented inflationary pressure right now, Teng said, adding that the Chinese government should seize the opportunity during a period when overseas inflation is transmitted into the domestic market, to put more efforts into maintaining stable growth.
The readings came amid concerns that global inflationary pressure could persist into 2022, after the US Federal Reserve recently dropped the word "transitory" when describing inflation.
CPC leadership highlights 'stability' as priority for economic work next yearChina can leverage more policies to maintain economic stability and prevent financial risks, amid the rise in coronavirus infections and global inflationary pressure, International Monetary Fund experts and former finance officials said.
In the World Economic Outlook report published in October, IMF experts said new challenges may emerge due to the faster-than-expected monetary tightening of the US Federal Reserve and underestimations of inflationary pressure.
Inflationary pressure is mainly driven by firmer demand, commodity price pressures and supply chain disruptions, IMF economists said at the seminar.
Christoffer Koch, an economist from the IMF's research department, said central banks can generally get through transitory inflationary pressures and avoid tightening until there is more clarity on underlying price dynamics.
Guan Tao, global chief economist at BOC International and a former official at the State Administration of Foreign Exchange, said disruption to global supply chains caused by the pandemic could mean sustained inflationary pressure.
"Central banks might have underestimated the inflationary risk," Guan said, adding that the effects of aggressive monetary easing have been accumulating since the 2008 global financial crisis.
She suggested all countries expedite COVID-19 vaccination and make policy adjustments to cope with inflationary pressure in light of their domestic conditions.
Supplies of key commodities essential for livelihood ample, top regulator saysChina has the confidence and capability to keep prices stable within a reasonable range despite the expected inflationary pressure likely continuing globally, the country's top economic regulator said.
Looking into the future, inflationary pressure will continue for a period of time across the globe, while China's overall prices will remain in a reasonable range.
Inflationary pressure on the industrial goods front and downward pressure on economic growth both emerged," said Tang Jianwei, chief researcher at Bank of Communications' financial research center.
Although pork prices have been falling, thus somewhat softening the impact of costlier vegetables, concerns about rising inflationary risks have been growing.
They discussed the macroeconomic situation and policies of China and the US, including economic growth conditions, inflationary pressure, financial stability, supply chains and other issues, the commerce official said.
China's central bank will maintain a stable monetary policy for the rest of the year, suggesting gradually eased inflationary pressure and contained default risk among property developers, senior officials said on Friday.
Measures to help central bank to balance goals of stable prices, support developmentDespite factory-gate inflationary pressure, China is expected to further leverage its monetary policy in the rest of the year by reducing the cash that banks must hold in reserve to bolster the economy, experts said on Thursday.
Inflationary pressure"Overall, inflationary pressure curtails monetary policy space only in a limited way at present," Wen said.
"But inflationary risks may intensify as the economic recovery in and out of China has become increasingly uneven.
"Thursday's readings came amid rising concerns that inflationary pressure could persist globally due to energy shortages and disrupted supply chains.
The intensified cost pressure in China came amid rising inflationary pressure globally.
The biggest economic problem brought about by the pandemic has been the destruction of global industry and supply chains, leading to economic difficulties or rising operating costs, including rising commodity prices, inflationary pressure and a high number of corporate bankruptcies.
Moreover, Yellen's comments regarding tariffs from the perspective of US consumer interests may also be a way to justify and explain the current inflationary pressure for the US government.
Second, recent US inflationary pressure has risen significantly, and monetary policy has fallen into a dilemma.