It may be obvious that the United States needs to mend its anemic economy, but the possible consequences of policy changes in the world's biggest economy ripple across the globe.

Last Thursday, the US Federal Reserve announced it would buy US$40 billion of mortgage-backed bonds each month until the economy and labor market show substantial signs of improvement. The Fed also promised to keep short-term interest rates at current low levels until mid-2015.

The move was the Fed's third round of "quantitative easing," or QE3 or what some simply call "money printing."

By any name, the actions of the Fed can affect the Chinese economy. How much? Well, that's the current debate in the world's second-largest economy.

Some analysts blame the first two rounds of QE for expanding inflation, lame exports, "hot" money and disturbed rhythm of policy adjustments in China.

Naturally, assessments vary.

Some analysts said the latest easing could actually help China's exports if demand in the US picks up as a result. Others said a depreciating US dollar will make China exports more expensive.

Reignite inflation

Easier money can breed inflationary prices. Some analysts worry that QE3 will reignite inflation just after China spent more than a year damping it down. Any flare-up could delay China's own easing policies.

"Although this round of easing in the US is not as aggressive as before, it still creates a lot of uncertainties and makes it more complicated for China to stimulate its own economy," said Sun Lijian, an economics professor at Fudan University.Li Daokui, a former adviser to the central bank and now professor at Tsinghua University, said the latest US easing could channel more speculative capital flows into China as investors bet on a stronger yuan.

Also, the move could push up global commodity prices, which would also have an inflationary impact on China, Li said.

But Qu Hongbin, chief economist for China at HSBC, said the benefits of QE3 for China probably outweigh the potential risks."QE3 is likely to reduce unemployment in the US, stabilize its economy and boost consumption, which will be good news for Chinese exporters," Qu said. "A prosperous market in the world's largest economy will eventually help others, especially export-reliant countries like China."

Most agreed that the impact of QE3 will be less than the previous two rounds of US Fed easing because the amount of debt purchases involved in the latest move appears to be smaller.

Quantitative easing became a popular tool for the Fed and other central bankers after they dropped interest rates so low there was no more room to use the classic monetary lever. Between November 2008 and May 2010, the Fed bought US$1.75 trillion of debt under QE1. The second round, which started in March 2009, involved an additional US$600 billion in purchases of long-term Treasury securities.

QE3 is much milder, said Steven Green, an economist at Standard Chartered."The biggest difference is that the Fed pledged to act until the economy improved, rather than creating another program with a fixed end-point," Green said. "It makes the measure more flexible to respond to reactions in the US economy as well as in the world economy."

Critics have complained that the US has been trying to rescue its own economy at the expense of other countries, taking advantage of the dollar's position as a dominant global reserve currency.

Yuan's appreciation

QE1 and QE2 helped accelerate the yuan's appreciation, bolster prices in China, divert more speculative funds into the country and complicate China's monetary policy decisions, some economists said.

Reactions are a bit softer this time, possibly because conditions in China are also changing. China's current inflation is not as high as three years ago, and liquidity is tighter now.

Peng Wensheng, an economist with China International Capital Corp, said QE3 could actually help reverse a capital flight out of China.

"It may help stabilize China's external demand," Peng said.

"We are inclined to believe that the new easing should stabilize US domestic demand in the face of fiscal tightening, and thus help prevent China's export growth from falling sharply further."

He also said that the impact of QE3 on China's inflation should be much milder this time.

"China's economic growth has slowed significantly after real estate investment fell sharply, enterprises started emptying stockpiles and producer prices began contracting," he said. "Though QE3 may still spur demand for commodities, including speculative demand, China's needs are much more moderate."

So everyone will be waiting and watching to see what happens, both in the US and in China.

"It could pose a dilemma for Chinese policymakers if inflation here looks to be picking up earlier than expected," said Li Maoyu, an analyst at Changjiang Securities Co.

China's Consumer Price Index rebounded to 2 percent in August, up from 1.8 percent in July.

Quantitative easing is not unique to the US. Japan used it as early as 2001. On July 5, the Bank of England also announced a US$78 billion increase in the size of its asset purchase program. The European Union is currently debating use of massive bond-buying to help banks and spur economic growth.

But when it comes to firing an economic shot heard round the world, no one surpasses the US. It's only a matter of determining who gets wounded.