PBOC Dep. Governor Guiping signalled rising inflation and tightening monetary policies

Liu Guiping, Deputy Governor of the People’s Bank of China (PBOC) warned that China is facing growing supply chain risk, also raising concerns over rising inflation and tightening monetary policies, during the Global Asset Management Forum speech in Beijing on Saturday.

Key concerns

Growing anti-globalisation and nationalist sentiment that could have an impact on international trade.

Increasingly unpredictable course of the Covid-19 pandemic.

Covid-19 has sped up the shift in the global distribution of production.

In addition to the influence of geopolitical contests, China’s industrial sectors are facing double pressure – industries moving into Southeast Asia and back to developed countries.

Chip shortages and supply chain stoppages threaten supply chain security and competitiveness.

FX implications

The news exerts additional downside pressure on the commodities and Antipodeans ahead of the key Q4 2021 GDP from China.

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