Five charts to start your day

China continue to face the prospect of future deflation

Here’s a very interesting chart published by Reuters yesterday. China has been in the spotlight economically for all the wrong reasons since the end of the pandemic. The country was the first to lockdown its economy due to the disease and one of the last to fully reopen. It has never really been able to recover since.

Behind the scenes, the country has been struggling to come to terms with a construction boom that lasted more than 20 years. More than a quarter of China’s economy is made up of real estate and now the leverage propping up this industry is crumbling at its foundations.

Naturally, economic growth has cooled rapidly. In fact, there is even talk of deflation in China. This chart shows just how significant this slowdown has become. China's consumer prices experienced their sharpest decline in over 14 years in January, accompanied by a drop in producer prices.

The significant fall in prices, particularly in food, underscores persistent deflationary risks that could impact consumer behaviour in the near term.

Despite China's efforts to bolster economic growth, including recent cuts to bank reserves, concerns linger over weak domestic consumption and prolonged factory deflation.

Source: Reuters

Coming up:

• The Bank of England may need to rethink quantitative tightening

• Residential property prices are dropping fast in Germany

• Time spent eating and drinking

• The best selling mobile phones of all time

If you like what you see here, and you would like to view the other four charts, consider becoming a paid subscriber. It costs less than two cups of coffee for a whole month’s access.