The People’s Bank of China (PBOC) has issued China’s monetary policy implementation report for the first quarter this year, in which it has commented on the surge in global commodity prices, pointing out that, as of the end of April this year three major composite indexes, the WTI crude oil future price, the LME copper future price and the CRB commodity spot price index have risen by 187 percent, 89 percent and 51 percent year on year, respectively.
The PBOC said that governments in major economies are launching massive stimulus packages, while the spread of Covid-19 in overseas markets has been negatively affecting the supply of commodities, with ultra-loose monetary policies also contributing to the rapid rises in commodity prices. The PBOC also stressed that the influence of these factors is unlikely to be eliminated in the short term, and so the inflation of commodity prices in the global market may continue.
The POBC mentioned that China’s PPI may be pushed up by the rising global commodity prices, while the risk of imported inflation is generally manageable as China has insisted on a normal monetary policy even against the backdrop of the Covid-19 pandemic in 2020, and so its economic development is stable and improving and, accordingly, there is no basis for long-term inflation or deflation in China.