Economist: China should be alert to stagflation risks in fighting inflation

BEIJING, July 4 (Xinhua) -- Li Yining, one of China's leading economists, said on Friday that China is facing a pressing challenge of preventing inflation turning into stagflation. He said stagflation, the co-existence of high unemployment and high inflation, might occur if improper measures were taken to fight inflation so as to disrupt market expectations, or the economy failed to survive the global slowdown. Improper anti-inflation measures may lead to investors shying away, widespread unemployment worries or hard times for small and medium-sized companies, resulting in frustrated consumption, Li told the Second Meeting of the Standing Committee of the 11th National Committee of the Chinese People's Political Conference (CPPCC), the country's political advisory body. The global slowdown, on the other hand, would affect the... [read full story]