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China can’t ignore the US’ rising interest rates – it is not Japan


“It absolutely will not stop” may have been a descriptor for “the Terminator” in the 1984 movie, but it could equally be applied to the Federal Reserve as it raises US interest rates in 2022. That complicates matters for the People’s Bank of China (PBOC) as it seeks to navigate between the immediate needs of China’s economy and the bigger picture.

Looser PBOC monetary policy may make logical sense given the nature of the challenges currently facing the Chinese economy, but easing when the Fed is still raising US interest rates risks potentially undesirable consequences.

From an investment perspective, monetary policy trajectories in different jurisdictions have to be assessed on a cross-border basis.


Read More at https://www.scmp.com/comment/opinion/article/3189750/china-cant-ignore-us-rising-interest-rates-it-not-japan

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