China Needs Higher Inflation
Some Chinese economists have attempted to assuage inflation fears by noting that the recent surge in the producer price index is unlikely to translate into a sharp uptick in consumer prices. In fact, this is precisely what China should fear.
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BEIJING – Recent price increases in the world’s two largest economies have unnerved global markets, which have become accustomed to the low inflation – and even deflation – that has prevailed for decades. But, at least in China, a little inflation would not be a bad thing.