{
  "title": "People’s Republic of China: Selected Issues",
  "publication": "IMF Staff Country Reports, August 30, 2024",
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  "summary": "This Selected Issues paper assesses the downside risks to inflation around the baseline in China. Recent economic shocks in China, including the ongoing property sector adjustment, have resulted in disinflationary pressures and low inflation.",
  "sections": [
    {
      "heading": "Overview",
      "content": "- This Selected Issues paper assesses the downside risks to inflation around the baseline in China.\n- Recent economic shocks in China, including the ongoing property sector adjustment, have resulted in disinflationary pressures and low inflation.\n- The paper refines the list of deflation risk indicators to better reflect China’s deflation pressures."
    },
    {
      "heading": "Deflation Vulnerability Index (DVI)",
      "content": "- A deflation vulnerability index (DVI) has been developed, which combines data from many factors that may contribute to deflationary pressures.\n- Based on the DVI, China is currently experiencing its longest recorded period of downward pressure on inflation.\n- The inflation-at-risk analysis identifies the key components of the DVI that affect tail risk of core deflation."
    },
    {
      "heading": "Key findings and statistics",
      "content": "- The inflation-at-risk analysis suggests that output gaps and inflation expectations are the key components of DVI affecting the tail risk of core deflation in China.\n- The probability of deflation in China is currently estimated to be around 7 percent in the baseline.\n- After shocks to the DVI:\n  - Probability of deflation could be as large as 27 percent 9 months after a one standard deviation shock to DVI.\n  - Probability of deflation could be as large as 54 percent 9 months after a two standard deviation shock to DVI."
    },
    {
      "heading": "Thematic coverage",
      "content": "- Subject areas addressed in the paper include: Balance of payments, Economic sectors, Foreign direct investment, Inflation, Prices, Production, Services sector, Total factor productivity.\n- Keywords highlighted: B. deflation vulnerability index, emissions trading system, Foreign direct investment, Global, Inflation, inflation expectation, outward FDI, service sector productivity, Services sector, Total factor productivity.\n\nPeople’s Republic of China: Selected Issues. August 30, 2024.\n\n---\n\n Content in this bundle\n\n- People’s Republic of China: Selected Issues; IMF Country Report No. 24/276; July 1, 2024\n  - People’s Republic of China: Selected Issues; IMF Country Report No. 24/276; July 1, 2024 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - People’s Republic of China: Selected Issues; IMF Country Report No. 24/276; July 1, 2024 (PDF){rel=\"external\" type=\"application/pdf\"}"
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    "Published: August 30, 2024",
    "Series: IMF Staff Country Reports",
    "DOI: https://doi.org/10.5089/9798400285998.002",
    "This Selected Issues paper assesses the downside risks to inflation around the baseline in China.",
    "Recent economic shocks in China, including the ongoing property sector adjustment, have resulted in disinflationary pressures and low inflation.",
    "The paper refines the list of deflation risk indicators to better reflect China’s deflation pressures.",
    "A deflation vulnerability index (DVI) has been developed, which combines data from many factors that may contribute to deflationary pressures.",
    "Based on the DVI, China is currently experiencing its longest recorded period of downward pressure on inflation.",
    "The inflation-at-risk analysis identifies the key components of the DVI that affect tail risk of core deflation.",
    "The inflation-at-risk analysis suggests that output gaps and inflation expectations are the key components of DVI affecting the tail risk of core deflation in China.",
    "The probability of deflation in China is currently estimated to be around 7 percent in the baseline.",
    "After shocks to the DVI:",
    "Subject areas addressed in the paper include: Balance of payments, Economic sectors, Foreign direct investment, Inflation, Prices, Production, Services sector, Total factor productivity.",
    "Keywords highlighted: B. deflation vulnerability index, emissions trading system, Foreign direct investment, Global, Inflation, inflation expectation, outward FDI, service sector productivity, Services sector, Total factor productivity.",
    "**People’s Republic of China: Selected Issues; IMF Country Report No. 24/276; July 1, 2024**"
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