Price Dynamics in China

WPIEA2010221 Image
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Release Date: © September, 2010
ISBN : 978-1-45520-886-9
Stock #: WPIEA2010221
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Chinese inflation, particularly non-food inflation, has been surprisingly modest in recent years. We find that supply factors, including those captured through upstream foreign commodity and producer prices, have been important drivers of non-food inflation, as has foreign demand for Chinese goods. Domestic demand and monetary conditions seem less important, possibly reflecting a large domestic output gap generated by many years of high investment. Inflation varies systemically within China, with richer (and urban) provinces having lower, more stable, inflation, but this urban inflation also influence that in lower-income provinces. Higher Mainland food inflation also raises inflation in non-Mainland China.


Economic policy , Inflation , Monetary policy

More publications in this series: Working Papers