The affect of the European debt crisis on China will be “limited in scope,” Yi Xianrong, a researcher with the Institute of Finance and Banking under the Chinese Academy of Social Sciences, wrote in a commentary published in today’s China Daily newspaper.
The European debt crisis is “very different” from the 2008 financial crisis because it has so far been confined to smaller European nations, with neither Germany nor France having been greatly affected, Yi wrote.
Economic recovery in the U.S., Japan and other emerging markets and productivity gains for China’s export-oriented companies combined to spur increases in exports during the first five months of this year, Yi wrote.
China’s central bank also has “enough ammunition” to check increases in inflation, Yi wrote. Improved economic conditions in China and abroad will ease inflation pressures in the second half of this year, Yi wrote.