China’s Capacity Reduction Reform and Its Impact on Producer Prices

In late 2015, the Chinese authorities launched a policy to reduce capacity in the coal and steel industries under the wider effort of Supply-Side Structural Reforms. Around the same time, producer price inflation in China started to pick up strongly after being trapped in negative territory for more...

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Bibliographic Details
Main Author: Chen, Linxi
Other Authors: Ding, Ding, Mano, Rui
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 2018
Series:IMF Working Papers
Subjects:
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
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245 0 0 |a China’s Capacity Reduction Reform and Its Impact on Producer Prices  |c Linxi Chen, Ding Ding, Rui Mano 
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651 4 |a China, People's Republic of 
653 |a Natural Resource Extraction 
653 |a Producer prices 
653 |a Dynamic Treatment Effect Models 
653 |a Financial crises 
653 |a Mineral industries 
653 |a Natural resources 
653 |a Deflation 
653 |a Non-renewable resources 
653 |a Environmental management 
653 |a Metals and Metal Products 
653 |a Economics of specific sectors 
653 |a Time-Series Models 
653 |a Glass 
653 |a Informal Economy 
653 |a Foreign Exchange 
653 |a Currency crises 
653 |a International Economics 
653 |a Producer price indexes 
653 |a Macroeconomics 
653 |a Industry Studies: Primary Products and Construction: General 
653 |a Economic & financial crises & disasters 
653 |a Inflation 
653 |a Price indexes 
653 |a Environment 
653 |a Economics: General 
653 |a Natural Resources 
653 |a Mining sector 
653 |a Diffusion Processes 
653 |a Informal sector; Economics 
653 |a Metal prices 
653 |a Economic sectors 
653 |a Cement 
653 |a Nonrenewable Resources and Conservation: General 
653 |a Price Level 
653 |a Ceramics 
653 |a Metals; Prices 
653 |a Prices 
653 |a Underground Econom 
653 |a Studies of Particular Policy Episodes 
653 |a Dynamic Quantile Regressions 
653 |a Extractive industries 
700 1 |a Ding, Ding 
700 1 |a Mano, Rui 
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520 |a In late 2015, the Chinese authorities launched a policy to reduce capacity in the coal and steel industries under the wider effort of Supply-Side Structural Reforms. Around the same time, producer price inflation in China started to pick up strongly after being trapped in negative territory for more than fifty consecutive months. So what is behind this strong reflation—capacity cuts in coal and steel, or a strengthening of aggregate demand? Our empirical analyses indicate that a pickup in aggregate demand, possibly due to the government’s stimulus package in 2015-16, was the more important driver. Capacity cuts played a role in propping up coal and steel prices, explaining at most 40 percent of their price increase