China DEFLATION Just Gave 3 Month Warning For U.S! New Signal Explained

1 year ago
202

China Export Prices See Biggest Drop In A Decade Falling demand, commodity deflation and high inventories lead to price cuts. A big driver of low prices this year is the build-up of inventories over 2020, and in the first quarter, during a burst of optimism following the end of restrictions. That has since reversed, with businesses cutting prices to reduce their stock. Vivian Feng is a Shanghai resident who purchases discounted goods, from farm products to Nike Inc.’s t-shirts, and sells them to neighbors in her residential community. She said her suppliers have cut prices significantly this year due to high inventories and soft demand. “Some well-established apparel brands used to offer products for the group-buy channel at around 40% of the original prices in 2021, and they’re now selling at just 10% or even less,” said Feng. Some economists expect consumer inflation to trend lower for a few more months before picking up toward the end of the year as the higher base of comparison with last year fades and domestic demand picks up. Economists surveyed by Bloomberg expect full-year inflation to reach just 0.8% in 2023, the slowest pace since 2009. Low inflation is driving up real, or inflation-adjusted, interest rates in the economy, pushing up businesses’ debt-servicing costs and undermining the central bank’s pledge to spur lending.

TOPICS AND TIMESTAMPS:
Deflation in China 0:00
China vs the World 5:59
What You Need To Watch 8:34

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