Beijing, China / TimesNewswire / January 28, 2023 – Red-hot global inflation has eaten into peoples’ pockets in 2022. But China has not only anchored its consumer price index at two percent for the year, but also helped the easing of global inflation with the country’s stable prices and reliable supply chains.
As an export heavyweight, China has kept its price rises modest. In addition, it maintained a stable global industrial chain and supply chain and took the lead globally in resuming work, production and sales since the surge of the COVID-19 pandemic in early 2020. These have all contributed to the cooling of global inflation.
Despite strong economic headwinds and uncertainties in the past three years, China has maintained a prudent monetary policy. In addition, the country took multiple measures in enhancing its capacity to ensure stable food and energy supply, which supported the economy and met people’s basic needs.
China has increased its reserves of pork to enhance the ability to adjust storage to keep prices within a reasonable range. To boost energy supply, the country increased high-quality coal production capacity and improved the system for coal production, supply, storage and sales.
Global policy easing
In 2020, the coronavirus pandemic curbed mobility and even crashed the global stock market.
In the U.S., the Federal Reserve stepped in to offer unprecedented policy easing including cutting its target for the federal funds rate and making large purchases of U.S. government bonds and mortgage-backed securities.
Since 2021, levels of inflation internationally have obviously risen for many countries to mark the end of an era of low inflation. Especially in 2022, exacerbated by the Russia-Ukraine conflict, food and energy prices have risen and the prospect of a cost-of-living crisis continues to loom for many worldwide.
Consumer prices in the U.S. and the eurozone both reached record highs last year. In contrast, government officials have noted that China has managed to keep prices at a relatively low and stable level thanks to effective macroeconomic governance.
Earlier this month, Organization for Economic Co-operation and Development Secretary-General Mathias Cormann told CNBC that China’s recent reopening is “overwhelmingly positive” in the global fight to tame rising inflation as it will make supply chains operate more efficiently.
Global inflation is forecast to rise from 4.7 percent in 2021 to 8.8 percent in 2022 but to decline to 6.5 percent in 2023, according to an International Monetary Fund estimate in October 2022.