China Faces Deflation Risk as Prices Keep Dropping
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Consumer prices in China dipped 0.2% in October compared to a year earlier, marking the second decline in 4 months.
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Producer prices have been declining in China for over a year, signaling weak demand and oversupply across industries.
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Falling prices put China at risk of deflation, where debts remain heavy as incomes decline.
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Apartment prices have plunged up to 40% in recent years, making households reluctant to spend.
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China's strict pandemic controls appear to have durably suppressed consumer and business confidence.