China has another massive headache now: It can’t stem deflation | CNN Business
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While many central banks around the world are trying to cool inflation, China is grappling with falling prices this year.

While many central banks around the world are still trying to cool inflation, China is grappling with falling prices.

The Consumer Price Index (CPI) dropped 0.5% in November on an annual basis, the biggest fall since the depths of the pandemic three years ago, according to data released by China’s National Bureau of Statistics on Saturday.

The drop marked an acceleration in the rate of deflation from October, when the CPI fell 0.2% from a year earlier, and prompted calls for urgent action from Beijing to boost demand and prevent a downward spiral of prices.

The data come days after Chinese policymakers vowed to strengthen fiscal and monetary support to boost the world’s second biggest economy, which is struggling with a real-estate crisis, high youth unemployment and subdued consumer confidence.

  • BraveSirZaphod@kbin.social
    467·
    11 months ago

    Deflation tends to trigger massive layoffs since revenue drops and investment becomes a worse option than saving.

    Everyone always hopes that economic downturns will affect everyone but them specifically, but it really doesn’t work that way.

      • BraveSirZaphod@kbin.social
        145·
        11 months ago

        Unemployment is essentially the same as it was before the pandemic, and is actually a bit lower than it was in the beginning of 2018.

        Inflation is of course a problem. The point is that deflation is a much bigger problem. It’s not as big an issue if you have plenty of savings to fall back on, which is to say, if you don’t have savings to fall back on, you’re fucked.

        • surewhynotlem@lemmy.world
          192·
          11 months ago

          Unemployment is a shit metric when you can be starving, homeless, and employed. To those people, inflation is a life threatening squeeze.

          • Socsa@sh.itjust.works
            32·
            11 months ago

            Which countries do you think don’t have homeless people, just out of curiosity? In the west, homelessness has almost nothing to do with actual economic factors.

          • BraveSirZaphod@kbin.social
            313·
            11 months ago

            You’re the one who brought up layoffs, mate.

            Why did you bring up a metric that you yourself are calling shit?

    • Socsa@sh.itjust.works
      3·
      11 months ago

      It’s is quite shocking how much people on the internet decry financial illiteracy, and the turn around and demonstrate financial illiteracy.

    • hark@lemmy.world
      33·
      11 months ago

      Ah yes, 0.5% deflation will have people clamoring to save their money instead of investing. Following your logic, prices should just never ever drop.