China’s annual inflation rate rose just 0.2% last month, feeding fears of deflation in the world’s second-largest economy.
Beijing has increasingly prioritized boosting its domestic market in recent years. However, despite incentives — including a trade-in program to urge people to buy new cars and appliances — spending has flatlined, with a real estate slowdown weighing on consumer sentiment.
Cooling growth, persistent unemployment, and paltry state support haven’t helped, and experts don’t expect the trend to reverse soon. “With the imbalances between supply and demand set to persist, we doubt China’s deflationary pressures will fade any time soon,” an economist told The Wall Street Journal.
