Will China's deflation help global disinflation?

Deflation in China could aid near-term global disinflation, as declining export prices out of China translate into lower import prices for trading partner countries. J.P. Morgan Research estimates China’s deflation will lower global core goods inflation (ex-China) by 70 bp (basis points) over the second half of 2023.

Is China's deflation situation worsening?

China's deflation situation is worsening according to analysts from Citi. They stated in a Sunday report that "signs of price weakness are now spreading from goods to services". The triple whammy of domestic food prices, international oil price corrections, and weak domestic demand are contributing to this situation.

Why is China slipping into deflation?

China's economy has slipped into deflation as consumer prices declined in July for the first time in more than two years. The official consumer price index, a measure of inflation, fell by 0.3% last month from a year earlier. Analysts said this increases pressure on the government to revive demand in the world's second largest economy.