If China’s growth is so strong, why is inflation so weak?

When America unshackled its economy from pandemic-era restrictions two years ago, it also unlocked inflation. By mid-2021, consumer prices were rising by more than 5% compared with the previous year. China’s later, faster reopening is now more than three months old. But inflation remains locked down. Consumer prices rose by only 0.7% year-on-year in March, slower than anywhere else in the world.This newspaper described China’s reopening as the biggest economic event of the year. So why has it had such a small effect on prices? Some suspect the recovery is weaker than the official statistics portray. Analysts at China Beige Book, which relies on independent surveys to track the country’s economy, told clients they were “snickering” at official figures showing that retail sales surged by 10.6% in March compared with the previous year.