Recent reports indicate a significant shift in global economic dynamics due to China's increased export of cheap goods to foreign markets, a phenomenon some are calling the 'China Shock'. The price of U.S. imports from China has seen a decrease of -2.9% in January from the previous year, signaling a potential move towards global disinflation. Economists, including Thomas Gatley of Gavekal Dragonomics, suggest that China's impact on global prices is now more clearly pushing in a disinflationary direction. This trend is attributed to China's current economic slowdown, in contrast to its previous period of rapid growth. Some analysts argue that this could lead to a reduction in inflation rates more significantly than before. However, there are concerns about the long-term effects on the global economy, including potential deflation risks for the U.S. and impacts on the global economic Cold War, particularly in light of the EU's sanctions on Chinese companies.
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The World Is in for Another China Shock https://t.co/cmSMNKp1pm
China is flooding foreign markets with cheap goods again https://t.co/WlnaHP28TN I wouldn't worry too much about this. China is producing stuff that is already oversupplied. They will take losses as a result, but they won't show up in the GDP figures.
“.. Some economists see this China shock pushing inflation down even more than the first. China’s economy is now slowing, whereas, in the previous era, it was booming.” 🇨🇳 @WSJ #CPI https://t.co/a4KPh5Hz5S https://t.co/6oJk8UO7dW
The World Is in for Another China Shock. @WSJ https://t.co/A6EWobQtDp
China is flooding foreign markets with cheap goods again. Here's what it means https://t.co/Mv32zuN7hC https://t.co/Mv32zuN7hC
The balance of China’s impact on global prices is tilting even more clearly in a disinflationary direction,” said Thomas Gatley, China strategist at Gavekal Dragonomics @WSJ
The world is in for another China Shock. China is flooding foreign markets with cheap goods again. This time it isn’t buying much in return. https://t.co/oGM5sUMAzT
China is flooding foreign markets with cheap goods again https://t.co/AK3deuN2uq via @WSJ
China offering a global disinflation redux? The price of U.S. imports from China fell -2.9% in January from a year ago https://t.co/rgoveoqjon