China Should Prepare For Global Stagflation-CF40

China should use the next six months to intensify fiscal policy and pay more attention to price tools of monetary policy to stabilise economic growth, in order to prepare for the arrival of global stagflation, according to a working paper published by researchers at China Finance 40 Forum. China should maintain the flexibility of the yuan while closely monitoring capital flow anomalies, the paper said. Also, China should participate more in multilateral debt restructuring mechanisms, as major central banks tighten policy. Along with the sharp rise in global energy and grain prices, it is very likely to trigger debt crises in some emerging markets and developing countries, the paper said.