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Deflation is much more dangerous than inflation since people tend to postpone spending, awaiting even better prices which can lead to a vicious cycle. Hence the

Deflation is much more dangerous than inflation since people tend to postpone spending, awaiting even better prices which can lead to a vicious cycle. Hence the downplaying in the article? However, the demand for food and energy by households cannot deliberately be postponed and is therefore relatively stable. And at least the drop in food prices plus the seasonal effects seem to do a lot here. So there is hope that china gets back to inflation pretty soon.

maxglute 3y ago
>However, the demand for food and energy by households cannot deliberately be postponed and is therefore relatively stable. And at least the drop in food prices plus the seasonal effects seem to do a lot here. That's why economists look at core inflation minus food+energy. PRC core inflation rose by 0.4% in Jan aka ~4% annual inflation in goods / services. About same as US annualized core inflation. Dropping pork prices has been consistently dragging down CPI, and will likely fall more - it's reverting to pre African Swine Flu levels and my understanding is huge overproduction in recovery effort = lots of bacon entering market kicking price down. Other things to note, since producer price falling and core inflation rising businesses not making basic inputs are more profitable with lower input costs and higher prices. TLDR is most of PRC sectors doing fine. Except stock market, but that was never well developed and needs kick in ass. And RE, which was over due for correction. But still huge drag. Good for minority trying to buy housing. Bad for majority house owners with their life savings wrapped up. Which is why I think PRC doesn't want too much inflation that further inflates away wealth locked in housing.