In the coming years, the economies of China and the United States may take distinctly different paths.

Recently, both China and the United States have released a series of economic data, and we find that the United States has truly shut down the printing press, while China can remain entirely indifferent and even consider lowering interest rates in response.

Several pieces of data comparison reveal quite a few mysteries.

01, CPI

After the United States announced a better-than-expected employment report, the market was frightened, and the rebound in U.S. stocks was suddenly halted.

Now, U.S. investors are waiting for the upcoming CPI data to be released. However, before that, China took the lead in announcing CPI and PPI data, with inflation figures looking very good.

The CPI increased by 2.1% year-on-year; although it appears to have grown more than in the previous few months, this is also largely related to the lower base in January of the previous year.

The PPI fell year-on-year, and this divergence greatly aids corporate production and profits.

The latest CPI in the United States has not yet been announced, but the previous year-on-year increase in CPI was 6.5%, three times that of China.

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Due to our relatively low inflation, we may still see the possibility of loan interest rates trending downward in the coming period. This will be a significant boon for China's economic development.02, Deflation in Japan

Many ordinary people might think that inflation is bad, even if it's just 2.1%, and they would prefer prices to keep falling.

If prices were to keep falling, that would be deflation, and indeed, there is a developed economy that has been in a state of deflation for many years, suffering as a result for three decades: Japan.

Therefore, successive Japanese governments and central bank governors have been committed to finding ways to help Japan escape deflation and to slightly increase the prices in Japan. However, even the modest goal of achieving a 2% inflation rate has been elusive for Japan despite years of effort.

It was only in 2022 that Japan managed to achieve this, largely due to the high inflation in Europe and America, the continuous rise in global commodity prices, and the constant depreciation of the yen. It was the combination of these factors that allowed Japan to finally see inflation above its target range last year, but this seemed to have little to do with Japan's long-standing loose monetary policy.

As a result, while the US dollar, the euro, and the British pound have all seen interest rate hikes, the Bank of Japan has steadfastly refused to raise interest rates, maintaining its quantitative easing policy in the hope that Japan's inflation can continue to be sustained.

Over the years, Japan has also been mired in an economic slump due to deflation. Although excessively high prices can reduce consumer purchasing power, affecting consumption and production, the lack of price growth over the years has similarly sapped the motivation for manufacturing enterprises to produce and has also led to very slow wage growth in Japan over the past few decades.

This example should help everyone understand why the United States wants to control inflation and set a target range of 2%, rather than trying to completely suppress inflation.

This is also why I say that China's current level of inflation is optimal.

03, The United States Closes the Printing Press

(The translation of this section is pending as the original text was cut off.)After years of loose monetary policy in the United States, they are now compelled to halt the printing presses, resulting in a negative growth in M2 for December.

This data is also worth comparing; the central bank recently released the latest loan figures for January, which mentioned an M2 year-on-year growth rate of 12.6%, a rate that has been above 10% for nearly a year.

Of course, it is not advisable to print money like the United States does, but to stimulate the economy, maintaining an appropriate monetary growth rate is very necessary.

We are now bold enough to promote credit growth, a point that the American business community greatly envies.

The loan interest rates in the United States are increasing, and American businesses are bearing higher financial costs. To compress these costs, they have to minimize financing, and reducing financing inevitably makes the development of businesses difficult. Hence, the American business community envies the business environment in China.