China Faces Down Deflation Fears
(15 January 2024 – China) The Chinese economy is slipping further into its worst deflation spiral in decades.
The decline in economic growth signals trouble for the global economy as sluggish demand grips the second-largest economy. WSJ reports that Morgan Stanley economists described the situation as the “longest and deepest” deflation in China since the Asian financial crisis in 1998, when countries across the region overheated and entered recessions that took years to recover from.
“Persistent deflation or very low inflation in China could contribute to a higher trade surplus and more trade frictions with the rest of the world” said Absolute Strategy Research Emerging Markets Economist, Adam Wolfe.
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