Stay informed with free updates
Simply sign up to the Chinese economy myFT Digest — delivered directly to your inbox.
China must act swiftly to combat deflationary pressures, according to former central bank governor Yi Gang. Speaking at the Bund Summit in Shanghai, Yi emphasized the need for policymakers to implement monetary policy adjustments to support the real economy, as reported by Chinese state-backed media outlet Caijing.
Yi, who served as the head of the People’s Bank of China for five years before stepping down last year, highlighted the importance of bringing the GDP deflator back into positive territory to counter deflationary trends.
The Chinese economy has been grappling with weak domestic demand exacerbated by the impact of the pandemic, particularly in the property market. This has led to intense competition, lower prices, reduced corporate profits, and overall deflationary pressures.
Concerns about a potential prolonged period of low economic growth, similar to Japan’s experience after the burst of its economic bubble in the 1990s, have been growing among Chinese officials, economists, and academics.
Despite efforts to limit public discussion of economic issues like deflation, events like the Bund Summit continue to shed light on these critical topics. This year’s summit, hosted by the China Finance 40 Forum, featured international figures and experts discussing the economic challenges facing China.
Notable absences of senior Chinese government officials at the event, as well as the presence of prominent US figures like former Treasury Secretary Robert Rubin and Nobel laureate Michael Spence, underscore the global significance and implications of China’s economic situation.