01934cas a2200301 a 4500 AALejournalIMF022075 230101c9999 xx r poo 0 0eng d 5.00 USD 9781484375914 1018-5941 BD-DhAAL BD-DhAAL Chen, Linxi. China's Capacity Reduction Reform and Its Impact on Producer Prices / Linxi Chen, Ding Ding, Rui Mano. Washington, D.C. : International Monetary Fund, 2018. 1 online resource (17 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students 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. Mode of access: Internet Deflation imf Inflation imf Price Level imf Ding, Ding. Mano, Rui. IMF Working Papers; Working Paper ; No. 2018/216 Full text available on IMF http://elibrary.imf.org/view/journals/001/2018/216/001.2018.issue-216-en.xml IMF e-Library