US Faces Inflationary Risks From China Factory Boom, NY Fed Says

China’s effort to boost manufacturing and shore up the economy amid a real estate slump could put “meaningful upward pressure” on US inflation and push back the start of monetary easing, according to new research by the Federal Reserve Bank of New York.

Credit flows to China’s factories have accelerated sharply over the past few years, as authorities seek to compensate for diminished lending to the property sector. That’s matched by a shift in rhetoric from Chinese leaders as they talk up industrial policy. The new approach stands a chance of boosting China’s economic growth above the rates ...