• Wed. May 29th, 2024

China’s Unexpected Manufacturing Slowdown Could Have Implications for US Economy and Inflation

BySamantha Nguyen

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

New research has indicated that there was an unexpected slowdown in the output at China’s factories in July, which could have implications for the US economy. Chinese policymakers are making efforts to boost their economy by encouraging investments in the manufacturing sector, but this move could potentially lead to an increase in inflation in the US. As a manufacturing boom in China would create upward pressure on prices, and recent changes in credit allocation are also contributing to this shift towards manufacturing. With bank lending moving away from the property sector and towards manufacturing, there is a notable increase in new “green loans” as China’s clean energy sector grows. If these investments in manufacturing are successful, and credit growth in China rises to 12% over the next two years, it could impact prices in the US. The increased demand from a manufacturing boom in China would lead to higher costs for producers, which would eventually be passed on to consumers, resulting in a sustained increase in inflation over the next two years. Contrary to conventional wisdom, which suggests that a manufacturing-led expansion in China would be disinflationary for the US, researchers point out the potential pressures that increased Chinese production would place on global commodity markets and the manufacturing supply chain.

By Samantha Nguyen

As a content writer at newsqwe.com, I am passionate about crafting engaging and informative articles that captivate our audience. With a background in journalism and a keen eye for detail, I strive to deliver content that is not only well-researched but also adds value to our readers' lives. From breaking news stories to in-depth features, I take pride in my ability to tell compelling stories that resonate with our diverse audience. When I'm not typing away at my keyboard, you can find me exploring new cafes, practicing yoga, or getting lost in a good book. I am thrilled to be a part of the newsqwe.com team and look forward to sharing my love for writing with all of our readers.

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