China's Domestic Deficit and Global Inflation

China Economy with Fexingo: Beijing's Policies, Trade, and Asia-Pacific Markets · Oct 18, 2026 · 13m · transcript

While headlines focus on China's export machine, a quieter crisis is unfolding in Beijing's domestic accounts. With the current account deficit widening to negative two hundred forty-six billion dollars in early 2026, the People's Bank of China faces a structural squeeze that traditional trade analysis misses. Lucas and Luna break down how this internal liquidity gap forces monetary policy choices that ripple through Asian bond markets and US consumer prices. We examine why the yuan's stability at six point six nine per dollar masks a deeper capital allocation problem, and…