Effects of China’s Currency Supply: Basis for Action Plan

Abstract

The study investigated the relationship between currency oversupply and inflation in China and proposed strategies to enhance currency management. Using a descriptive-quantitative research design, the study focused on Beijing, the country’s economic hub, and employed purposive sampling to select respondents, including central bank officials, economists, government representatives, and financial institutions, ensuring diverse and expert insights. Data were collected through a validated survey questionnaire covering three areas: China’s currency supply and monetary policy, current supply status with associated challenges and strategies, and the economic effects of currency supply. The collected data were analyzed using SPSS to identify trends and key issues. Findings indicated that China’s currency supply significantly affected economic stability and the effectiveness of monetary policy, highlighting the need for greater transparency and enhanced central bank interventions. Respondents generally perceived the currency supply positively but emphasized the necessity of aligning currency growth with overall economic expansion, particularly in the context of digital finance. The study identified major challenges in managing China’s currency supply and underscored the potential of technology-driven solutions, including digital payment systems, to improve efficiency and reliability. Insights from the research provided actionable recommendations for policymakers, aiming to optimize currency management, mitigate inflation risks, and support sustainable economic growth in the digital era. Overall, the study served as a basis for developing an action plan to strengthen China’s monetary policy framework and enhance the effectiveness of currency supply management.