TOKYO – Pot. Kettle. Black. This proverbial idiom surely leapt to People’s Bank of China Governor Pan Gongsheng’s mind when Japan’s former central bank head offered Beijing advice on battling deflation.
On Friday (September 6), Haruhiko Kuroda, who headed the BOJ from 2013 to 2023, appeared at the Shanghai’s Bund Summit full of pointers for PBOC officials. Kuroda warned them to act urgently and boldly to avoid “Japanification” risks. “Central banks should avoid prolonged deflation even if it is mild, that could affect wage determination,” he said.
This was three days before today’s news that mainland consumer prices rose less than many economists expected in August. The 0.6% increase from a year earlier comes amid factory-gate deflation, a trend that’s plagued the PBOC and Chinese economy since 2022. In July, producer prices fell 1.8% from a year earlier following a 0.8% decline in June.