• Fri. Jun 14th, 2024

China’s Manufacturing Slowdown: Implications for US Inflation and Global Commodities

BySamantha Jones

Mar 25, 2024
China’s Economic ‘Sugar High’ Could Amplify US Inflation

In recent months, there has been a sudden drop in production at China’s factories, which has caught the attention of researchers who believe it could have far-reaching implications for the US economy. Despite efforts by Chinese policymakers to boost their economy by promoting investments in manufacturing, this move could potentially lead to an increase in inflation in the US.

According to new research, a manufacturing boom in China would create upward pressure on prices, leading to higher costs for producers and eventually being passed on to consumers. If successful, and credit growth in China rises to 12% over the next two years, it could have a significant impact on prices in the US.

However, recent changes in credit allocation in China are also playing a role in this shift towards manufacturing. With bank lending moving away from the property sector and towards manufacturing, there is a noticeable increase in new “green loans” as China’s clean energy sector grows. Estimates suggest that new manufacturing lending in China could make up a significant portion of total lending in the near future.

Despite conventional wisdom suggesting that a manufacturing-led expansion in China would be disinflationary for the US, researchers warn that increased Chinese production could put pressure on global commodity markets and the manufacturing supply chain. As such, the effects on global inflation cannot be ignored.

By Samantha Jones

As a dedicated content writer at newszxcv.com, I bring a passion for storytelling and a keen eye for detail to every piece I create. With a background in journalism and a love for crafting engaging narratives, I strive to deliver informative and captivating content that resonates with our readers. Whether I'm covering breaking news or delving into in-depth features, my goal is to inform, entertain, and inspire through the power of words. Join me on this journey as we explore the ever-evolving world of news together.

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