BEIJING — As the U.S. pumps trillions of dollars into its economy in the wake of the coronavirus pandemic, economists are concerned about spillover effects in China, including the risk of “imported inflation.”
Worries about high inflation, or rapidly rising prices, hit U.S. markets last week. The U.S. Congress is reviewing a $1.9 trillion stimulus plan that critics say could cause inflation to soar, and add to debt levels that rose following last year’s historic $2 trillion stimulus package.
In China, economists are wary of risks to growth as the country tries to recover fully from the shock of the pandemic.
“The large-scale issuance of U.S. Treasurys, and the rapid expansion of the Federal Reserve (balance sheet), have increased the spillover effect of U.S. macro policies,” former finance minister Lou Jiwei said in an article published in the latest issue of the government-affiliated journal “Public Finance Research.” That’s according to a CNBC translation of the Chinese text.
Lou said the effects from major countries’ policies will hit emerging countries economically and financially. “We are facing major changes not seen for a century,” he said.
Lou is also the head of the foreign affairs committee of the Chinese People’s Political Consultative Conference — the political advisory body meeting during the annual “Two Sessions” parliamentary gathering that began this week.
As part of the parliamentary meeting, Premier Li Keqiang announced Friday a