China's economic rise has inflation implications for the whole world

Abstract

China s economy has been growing rapidly for the past three decades. The vigorous pace of growth has increased China s weight in the world economy, and it is now the third largest economy in the world, after the United States and Japan. Its significance in world trade is larger still, as it occupies a unique position as the manufacturing workshop of the world. Developments in China therefore affect prices elsewhere too, including the euro area.