Inflation in China Down to Lowest Number in More Than Two Years; Analyst Proposes Giving Cash Handouts to Avoid Deflation

0 7

china inflation deflation cash handouts

knife

Inflation in China registered an increase of 0.1% year-over-year in April, according to numbers from the National Bureau of Statistics of the country, falling below expectations. Some analysts are already warning about the dangers of deflation, even calling on the Chinese government to deliver cash handouts in order to push consumer demand.

Low Inflation Numbers in China Worry Analysts

China, one of the biggest economies in the world, has registered its lowest inflation numbers in more than two years, according to data coming from the National Bureau of Statistics (NBS). The Consumer Price Index (CPI) registered an increase of 0.1% year-over-year, dropping from 0.7% registered in March.

The drop in prices was caused in part by a decline in food and beverages prices, which went from 2.4% in March to less than 1% in April. Core inflation, which does not include prices of food and beverages, rose 0.7% year-over-year. The numbers are below the expectations of the country for this year, established around a 3% ceiling that is not likely to be touched.

The numbers have been worrying analysts, who take them as a testament to the slow and rocky economic recovery of China after the coronavirus pandemic. However, Zou Lan, an official with the Peoples Bank of China (PBOC), dismissed these worries, stating that “there is no basis for long-term deflation or inflation,” and that consumer demand is expected to warm up during the second half of this year.

Proposals to Avoid Deflation

Standard Chartered has explained they expect inflation levels to hit 0% in the next months, “as a crude-oil price spike in the first half of 2022 created a high comparison base.” However, even with a slow inflation level, the bank has predicted a growth rate of more than 5% without adjusting interest rates, which are now at 1%.

Experts who are worried about the possibility of deflation have made different proposals to avoid it. Li Daokui, a professor of economics at Tsinghua University and former member of the PBOC advisory board, has called for the government to deliver cash handouts to citizens to spur demand. Last month, Li stated:

Even with a conservative estimate, 500 billion yuan in consumption vouchers will drive one trillion yuan in overall consumption.

The state would also receive over 300 billion yuan in taxes derived from the spending directly enabled by the cash handouts, according to the professor.

What do you think about the low inflation numbers in China and the worries about a possible deflation in the Chinese economy? Tell us in the comment section below.

Leave A Reply

Your email address will not be published.

bitcoin
Bitcoin (BTC) $ 68,127.25
ethereum
Ethereum (ETH) $ 3,516.27
tether
Tether (USDT) $ 1.00
bnb
BNB (BNB) $ 602.35
solana
Solana (SOL) $ 184.20
staked-ether
Lido Staked Ether (STETH) $ 3,516.50
usd-coin
USDC (USDC) $ 0.999987
xrp
XRP (XRP) $ 0.600943
dogecoin
Dogecoin (DOGE) $ 0.140045
the-open-network
Toncoin (TON) $ 7.14
cardano
Cardano (ADA) $ 0.438246
avalanche-2
Avalanche (AVAX) $ 32.63
tron
TRON (TRX) $ 0.13444
shiba-inu
Shiba Inu (SHIB) $ 0.000018
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 68,068.24
chainlink
Chainlink (LINK) $ 14.84
polkadot
Polkadot (DOT) $ 6.41
bitcoin-cash
Bitcoin Cash (BCH) $ 398.38
near
NEAR Protocol (NEAR) $ 6.30
uniswap
Uniswap (UNI) $ 8.07
litecoin
Litecoin (LTC) $ 73.53
dai
Dai (DAI) $ 1.00
pepe
Pepe (PEPE) $ 0.000013
leo-token
LEO Token (LEO) $ 5.69
wrapped-eeth
Wrapped eETH (WEETH) $ 3,643.91
matic-network
Polygon (MATIC) $ 0.546705
internet-computer
Internet Computer (ICP) $ 10.70
kaspa
Kaspa (KAS) $ 0.178958
fetch-ai
Artificial Superintelligence Alliance (FET) $ 1.47
ethereum-classic
Ethereum Classic (ETC) $ 24.17
aptos
Aptos (APT) $ 7.49
ethena-usde
Ethena USDe (USDE) $ 1.00
stellar
Stellar (XLM) $ 0.105703
monero
Monero (XMR) $ 163.93
blockstack
Stacks (STX) $ 1.97
mantle
Mantle (MNT) $ 0.87804
render-token
Render (RNDR) $ 7.21
dogwifcoin
dogwifhat (WIF) $ 2.81
filecoin
Filecoin (FIL) $ 4.77
injective-protocol
Injective (INJ) $ 27.95
arbitrum
Arbitrum (ARB) $ 0.798878
hedera-hashgraph
Hedera (HBAR) $ 0.074266
maker
Maker (MKR) $ 2,858.83
immutable-x
Immutable (IMX) $ 1.68
crypto-com-chain
Cronos (CRO) $ 0.095402
okb
OKB (OKB) $ 42.32
cosmos
Cosmos Hub (ATOM) $ 6.50
vechain
VeChain (VET) $ 0.030693
bittensor
Bittensor (TAO) $ 349.04
bonk
Bonk (BONK) $ 0.000034
arweave
Arweave (AR) $ 34.14
optimism
Optimism (OP) $ 1.97
sui
Sui (SUI) $ 0.850766
the-graph
The Graph (GRT) $ 0.220197
floki
FLOKI (FLOKI) $ 0.000208
first-digital-usd
First Digital USD (FDUSD) $ 1.00
rocket-pool-eth
Rocket Pool ETH (RETH) $ 3,921.05
renzo-restaked-eth
Renzo Restaked ETH (EZETH) $ 3,558.98
mantle-staked-ether
Mantle Staked Ether (METH) $ 3,656.05
lido-dao
Lido DAO (LDO) $ 1.94
theta-token
Theta Network (THETA) $ 1.66
notcoin
Notcoin (NOT) $ 0.016044
thorchain
THORChain (RUNE) $ 4.88
bitget-token
Bitget Token (BGB) $ 1.14
ondo-finance
Ondo (ONDO) $ 1.10
fantom
Fantom (FTM) $ 0.540299
coredaoorg
Core (CORE) $ 1.66
jasmycoin
JasmyCoin (JASMY) $ 0.030415
aave
Aave (AAVE) $ 98.76
whitebit
WhiteBIT Coin (WBT) $ 10.14
jupiter-exchange-solana
Jupiter (JUP) $ 1.08
based-brett
Brett (BRETT) $ 0.143331
celestia
Celestia (TIA) $ 6.72
pyth-network
Pyth Network (PYTH) $ 0.367838
algorand
Algorand (ALGO) $ 0.159438
sei-network
Sei (SEI) $ 0.392304
ether-fi-staked-eth
ether.fi Staked ETH (EETH) $ 3,477.66
mantra-dao
MANTRA (OM) $ 1.35
quant-network
Quant (QNT) $ 76.36
gatechain-token
Gate (GT) $ 7.83
elrond-erd-2
MultiversX (EGLD) $ 36.66
flow
Flow (FLOW) $ 0.651946
beam-2
Beam (BEAM) $ 0.01956
msol
Marinade Staked SOL (MSOL) $ 221.37
gala
GALA (GALA) $ 0.02644
kucoin-shares
KuCoin (KCS) $ 10.02
axie-infinity
Axie Infinity (AXS) $ 6.42
bitcoin-sv
Bitcoin SV (BSV) $ 47.67
popcat
Popcat (POPCAT) $ 0.948735
eos
EOS (EOS) $ 0.611879
flare-networks
Flare (FLR) $ 0.020196
kelp-dao-restaked-eth
Kelp DAO Restaked ETH (RSETH) $ 3,548.24
tokenize-xchange
Tokenize Xchange (TKX) $ 11.06
ethereum-name-service
Ethereum Name Service (ENS) $ 26.87
dydx-chain
dYdX (DYDX) $ 1.45
bittorrent
BitTorrent (BTT) $ 0.00000090474241
mog-coin
Mog Coin (MOG) $ 0.000002
ordinals
ORDI (ORDI) $ 41.40
akash-network
Akash Network (AKT) $ 3.53
neo
NEO (NEO) $ 12.05