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From Fiscal Stimulus Plan to China's Own 401(k) Plan

22 Jun 2023
Since 2022, China has undertaken a series of measures, including reductions in both interest rates and reserve requirement ratios. However, despite these efforts, China's industrial output and consumer spending have failed to meet expectations, and key indicators such as the Consumer Price Index (CPI) and the Producer Price Index (PPI) have shown a consistent decline, heightening concerns of deflationary pressures. The National Bureau of Statistics recently published the Consumer Price Index (CPI) for May, revealing a year-on-year increase of 0.2%, although it declined on a monthly basis. Simultaneously, the Producer Price Index (PPI) for industrial producers experienced a significant decline of 4.6%, extending the downward trend and reaching its lowest level since March 2016. Both these indicators fell short of market expectations.

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