Given the complex macro risks and transmission pathways brought about by the continuous rise in global stagflation risks, forward-looking and flexible policies should be maintained to address potential upward uncertainties. In response to input inflation, it is necessary to strengthen monitoring of the price trends of important commodities that are related to national economy and people's livelihood. Based on this, various contingency plans for ensuring supply and stabilizing prices should be prepared in advance to prevent the risk impact caused by significant price fluctuations in the short term. In response to the pressure of stable growth brought about by the downturn in exports, in addition to taking multiple measures to stabilize foreign trade, more policy reserves should also be established to stimulate domestic demand as a hedge. Considering that input inflation and weak exports have a more significant impact on small and medium-sized private enterprises, monetary and fiscal policies should provide more targeted support through credit support and tax and fee reductions. Due to China's recent policy of stabilizing growth, which has significantly increased the certainty of fundamentals, the rise in the safe haven nature of RMB assets will continue to attract foreign investment inflows. Therefore, the probability of systemic financial risks arising from external shocks is relatively low. However, considering the high degree of uncertainty in overseas fundamentals and policies under the stagflation environment, domestic regulatory authorities also need to strengthen macro prudential supervision to prevent potential risks in advance..



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