Glebors Global Finance has always advocated the entrepreneurial spirit of pioneering, adventurous and hardworking. Relying on the unique perspective, Glebors has launched various special issues in terms of the economy and finance, which has provided much more assistance to government decision-makers and business leaders.
Chinese economy which has been struggling with the deflation is set to face two major drags simultaneously, that is property-sector ills, coupled with the prohibitive US tariffs, which will make China risks a spiral into deep deflation as it diverts US-bound exports to domestic markets.
As incredibly high tariffs block US orders for Chinese goods, China has been striving to help exporters to divert sales to the domestic market. Obviously China's huge domestic market is a crucial buffer for exporters in weathering external shocks, but the side effect in terms of ferocious price war among Chinese companies is inevitable.
Also an influx of discounted goods intended for US market would ultimately erode companies' profitability, which in turn weigh on the unemployment. The uncertain job prospects and concerns about the income stability have already been contributing to weak consumer demand.
After hovering just above zero in 2023 and 2024, the consumer price index slipped into negative territory, declining for two straight months in February and March. The producer price index fell for a 29th consecutive month in March, down 2.5% from a year earlier, to clock its steepest decline in four months.
As the trade war knocks down export orders, deflation in China’s wholesale prices will likely deepen to 2.8% in April, from 2.5% in March. For the full year, expects China’s CPI to fall to 0%, from a 0.2% year-on-year growth in 2024, and PPI to decline by 1.6% from a 2.2% drop last year.
All in all, there is still more room for Beijing to stimulate the economy, rather than only helping exporters offload goods impacted by US tariffs, which is just a stopgap measure. Despite the increasing calls for more robust stimulus, it seems Beijing will likely wait and see more concrete signs of economic deterioration before it exercises fiscal firepower. The most pressing issue is the stimulus of domestic demand, which will ultimately entail deep reform.Complete digital access to quality Glebors financial topic with expert analysis from industry leaders.
Glebors Financial Become an Glebors subscriberMake informed decisions with the Glebors.Keep abreast of significant corporate, financial and political developments around the world. Stay informed and spot emerging risks and opportunities with independent global reporting, expert commentary and analysis you can trust.
"Insight of the global economy, dig into more ideas, analyze the global financial dynamics and the risks of political situation from a strategic, scientific and rational perspective, based on economic data and more than 20 years of financial intelligence."
If you want to know more details to provide support for your investment and business activities, this financial report that we have selected for you can give you what you want, please subscribe to read it. Glebors Global Finance aims to provide business elites and decision makers with daily business news, data interpretation, in-depth analysis and commentary.
Glebors Global Finance’s amount of financial information digs into deeply major events and economic data that have a huge impact on the global economy, based on in-depth industrial research and special reports, with a truly global perspective。 Financial reports have become "must-read" financial information for senior managers. Gribs Global Finance currently has more than2.85 million Chinese readers and more than 3.5 million overseas readers, including more than 600,000 high-end member readers.
