Inflation: China & America

Is the US policy of quantitative easing that is pushing up prices internationally or is China exporting its own domestic inflation to the rest of the world along with all the goods it ships from its ports?

It’s a question that is causing a lot of bitter debate. Chinese officials have little doubt. They insist the culprit is the US Federal Reserve. By effectively printing US$75 billion a month through its policy of quantitative easing, the Fed is debasing the value of the US dollar, they argue. That is pushing up the price of internationally traded commodities priced in US dollars, like oil and copper, fuelling inflation in China and elsewhere.

It almost goes without saying that plenty of US-based economists disagree. If the world is suffering inflation, they say, it is China fault. By ordering China’s banks to stimulate the economy during the crisis by ramping up their lending, Beijiing has created an enormous monetary overhang. That’s causing inflation in China, including wage inflation, which is pushing up the prices of the goods China exports to the rest of world.

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About Andre

Experience Business Developer & Alliance Partner Manager with Strong Technical Background Dealing with Complex Solutions
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