## People’s Republic of China: Selected Issues

_IMF Staff Country Reports, August 30, 2024_

## Source details

**Canonical URL:** [People’s Republic of China: Selected Issues](https://www.imf.org/en/publications/cr/issues/2024/08/29/peoples-republic-of-china-selected-issues-554232)

## Other formats

- [Markdown version](/en/publications/cr/issues/2024/08/29/peoples-republic-of-china-selected-issues-554232/index.md)
- [Structured JSON version](/en/publications/cr/issues/2024/08/29/peoples-republic-of-china-selected-issues-554232/index.json)
- [Bundle manifest](/en/publications/cr/issues/2024/08/29/peoples-republic-of-china-selected-issues-554232/bundle-manifest.json)

## Bibliographic details
- Published: August 30, 2024
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400285998.002

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### Overview
- 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.

### Deflation Vulnerability Index (DVI)
- 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.

### Key findings and statistics
- 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:
  - Probability of deflation could be as large as 27 percent 9 months after a one standard deviation shock to DVI.
  - Probability of deflation could be as large as 54 percent 9 months after a two standard deviation shock to DVI.

### Thematic coverage
- 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. August 30, 2024.*

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## Content in this bundle

- **People’s Republic of China: Selected Issues; IMF Country Report No. 24/276; July 1, 2024**
  - [People’s Republic of China: Selected Issues; IMF Country Report No. 24/276; July 1, 2024 (Markdown version)](/-/media/files/publications/cr/2024/english/1chnea2024004-print-pdf.pdf.md){rel="alternate" type="text/markdown"}
  - [People’s Republic of China: Selected Issues; IMF Country Report No. 24/276; July 1, 2024 (PDF)](/-/media/files/publications/cr/2024/english/1chnea2024004-print-pdf.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/cr/issues/2024/08/29/peoples-republic-of-china-selected-issues-554232_