China should focus on fighting deflationary pressure, former central bank governor says

China’s policymakers need to boost domestic demand, according to Yi Gang, former head of the People’s Bank of China. Speaking at the Bund Summit in Shanghai, Yi emphasized the importance of fighting deflationary pressure and improving the real estate market and local government debt situation. Proactive fiscal and accommodative monetary policies are required for addressing this. Despite inflation in the US and Europe, China’s consumer prices have fallen in 2023. Yi expects the consumer price index to converge above zero by year-end, while the producer price index is likely to reach zero.