Amid diminished demand, both domestically and internationally, the Chinese economy has experienced a state of deflation. The country s consumer price index registered a year-on-year decrease of 0.3 per cent, as reported by the National Bureau of Statistics (NBS) on August 9. Additionally, the producer price index (PPI) had encountered its 10th consecutive month of decline, reflecting a 4.4 per cent drop compared to the previous year.
The prospect of slower global price pressures may be one of the few upsides of Chinas descent into deflation as the economy struggles to regain its footing after a post-Covid bounce faded. Inflation is likely to remain muted as a property slump and troubles in the shadow banking industry curb spending and investments by both consumers and companies.
The Biden administration's tariffs and new tech restrictions on China could cause some blowback to the U.S. economy as Beijing grapples with a serious slowdown.
Once seemingly "inexhaustible" engine which propelled China is now sputtering, posing alarming risks for Chinese households and economies around the planet. From a profit-enhancing version of globalization, China has devolved into the ultimate wild card in a moment of extraordinary uncertainty for the world s economy, the New York Times reported.