In light of recent economic data, a top official from the People's Bank of China addressed concerns about signs of deflation in the country. Wang Yiming spoke at the Caixin summit in Beijing Today, dismissing fears that China might be heading towards a '90s Japan-like stagnation due to temporary deflation pressures.
Data released on Thursday showed a 0.2% year-on-year drop in consumer prices for October and a negative trend in the GDP deflator for two consecutive quarters in China. Despite these indicators, Wang characterized them as temporary and not strictly deflationary.
Wang attributed the sluggish prices to a short-term demand shortage. He emphasized the central bank's efforts in expanding the money supply to counteract these effects. This comes as part of China's broader strategy to manage its economic stability amidst global market uncertainties.
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