Economic & Finance

The Struggles of China’s Economy in Turbulent Times

China's economy is getting down

Beijing has grappled with sputtering growth, a plunging yuan, and a sharp fall in china’s economy industrial production since reducing zero-COVID lockdowns last year.

Deflation can now be added to the growing list of economic concerns facing the country.

In June, the average Chinese shopping basket cost the same as in May, while the Producer Price Index fell sharply.

In the West, “prices staying the same” might seem like a good thing, but most economists consider deflation a nightmare scenario.

People are likely to hold off on buying things in the hope that they’ll become cheaper in the near future, which can have a negative effect on economic growth.

In a recent episode of Bloomberg’s “Odd Lots” podcast, economist Richard Koo said that deflation is a very bad sign macroeconomically.

Individually, may be doing the right thing, but collectively, they are harming the economy.

Over the past 20 years, Japan has been trapped in a deflationary spiral, resulting in several “Lost Decades.”

With several key interest rates cut, China’s central bank has demonstrated how seriously it takes the threat of deflation and a slowdown in growth.

The global economy could suffer if those policies don’t work.

There is no doubt that any slowdown in China will be felt worldwide, since it is the second-largest country by GDP, an exporter of goods, and a major source of income for major US companies such as Nike and Apple.

Despite Beijing’s struggles with falling prices, people should be careful what they wish for when it comes to inflation.

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Editorial Director
I'm Shruti Mishra, Editorial Director @Newsblare Media, growing up in the bustling city of New Delhi, I was always fascinated by the power of words. This love for words and storytelling led me to pursue a career in journalism. In this position, I oversee the editorial team and plan out content strategies for our digital news platform. I am constantly seeking new ways to engage readers with thought-provoking and impactful stories.

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