China is experiencing its worst deflationary period in 14 years, with consumer prices falling 0.8% year-on-year in January 2024, the steepest decline since 2009. This marks the fourth consecutive month of decline, surpassing market forecasts which anticipated a 0.5% fall. The producer price index also fell 2.5%, indicating 16 straight months of deflation for factory-gate costs. Despite the deflation, China's economy continues to grow at approximately 5% annually. The People's Bank of China (PBOC) has reiterated its commitment to keeping the yuan at a reasonable and balanced level and expects consumer prices to rebound moderately. However, the central bank also projects a modest rebound in consumer costs as it battles the deflationary pressures. To address the economic slowdown and deflation, China's central bank has pledged to maintain flexible and precise policy support to boost domestic demand and maintain price stability. In response to these economic challenges, China's credit growth hit a record high in January following stimulus efforts, with banks extending 4.92 trillion yuan ($683.7 billion) in new yuan loans, quadrupling from the previous month and exceeding expectations. Aggregate financing rose to 6.5 trillion yuan ($900 billion), setting a new record. Cornell's Eswar Prasad warned that as deflation becomes entrenched, a heavy policy lift will be needed to rebuild confidence. Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, emphasized the need for China to act quickly and aggressively to prevent deflationary expectations from becoming entrenched among consumers. Additionally, vehicle CPI in China was down 5.6% year-on-year, while sales surged 47.9%.
China's economic crisis takes huge turn for the worse as inflation drops at fastest pace in 14 years https://t.co/KXyXhTqYy4
Months of deflation in China will eventually flow through.
Loan growth in China fell to a record low last month, overshadowing an unexpected pickup in credit and suggesting that borrowing demand remains weak in the world’s second-largest economy https://t.co/iYRcQEIwSi
China to export deflation to the world as economy stumbles via @FT https://t.co/tI2nO002WW
1/3 Total social financing was up RMB 6.5 trillion in January, according to the PBoC. January always represents the biggest monthly increase in the year, but this year's increase exceeded that of any previous year, and came in well above expectations. https://t.co/ZquL01wBuh
Wow. China credit just hit a new record in January. Aggregate financing rose to 6.5 trillion yuan ($900B) https://t.co/cqi4HXHI5N
Driven by a new tax-exempt retirement savings system, the number of accounts opened at five major Japanese securities firms in January increased by over 900,000, significantly boosting the stock market. https://t.co/QgNOinEoSm
Producer prices in China fell for a 16th straight month as the deflationary kerfuffle deepens in the communist country https://t.co/DiFNuv6jL3
Producer prices in China fell for a sixth straight month as the deflationary kerfuffle deepens in the communist country https://t.co/tth5UNdpvO
China new bank loans in Jan hit record high on policy support - Reuters https://t.co/e8jqf1GkJM
Deflation remains a big problem in China, with four months in a row of declining consumer prices. I wouldn't mind a little deflation here, but Yellen told us that ain't gonna happen. 😂 https://t.co/tpPIa3rQyp
China's credit growth hits record high in January following stimulus efforts https://t.co/YU7N2imx8F https://t.co/Z5VScwbEvP
🇨🇳 Banks extended 4.92 trillion yuan ($683.7 billion) in new yuan loans in January, hitting a record high, up sharply from December and beating analysts' expectations, data from the People's Bank of China (PBOC) showed on Friday. January lending more than quadrupled from… https://t.co/dN9F8R1bpT
China’s Credit Growth Jumps to Record in January After Stimulus https://t.co/xKYylzzV9E
⚠️ CHINA JANUARY NEW BANK LOANS HIT RECORD HIGH ON POLICY SUPPORT (Reuters) New bank loans in China jumped by more than expected to an all-time high in January, as the central bank moves to shore up the sputtering economy. Policymakers have pledged to roll out more measures to… https://t.co/e7XYjBuuFa
"The fundamental obstacle to decoupling is that China’s dominant position in world manufacturing makes it hard to find substitutes, and its economy is hard-wired to manufacture more than it can consume, dictating that it export the surplus." https://t.co/vEniIkRdac
Peru cut interest rates to the lowest level in a year and a half as inflation slows more than expected and the economy contracts. https://t.co/zxBDX8HoQX
Our Ahead Of The Herd daily addresses the hyper-sensitive question of China's FX rate. Deflation is now gripping the entire economy, as Xi denies Xi domestic demand boost. Devaluation is now inevitable...but Xi must now decide how & when, with no painless process in sight https://t.co/zC39CnG46Z
China’s central bank projects a modest rebound in consumer costs, as the world’s second-largest economy battles mounting deflationary pressures https://t.co/uPiRrSMvsO
The way China exports deflation is by exporting more goods and thus producers who don't match the lower China price lose market share. the RMB and weak domestic demand say "but China" -- creating a powerful force opposing "near shoring," "decoupling" and the like https://t.co/DQruHMenwc
Chinese deflation said to be accelerating. Most deflation in over 15 years. Good case study how deflation is more harmful for stocks than inflation.
China Double-Ds: Consumer Prices Suffer Worst Deflation Since GFC, Producer Price (Downside) Pressures Persist https://t.co/gqwQld4BcZ
China suffers most consistent decline in inflation in 14 years (Reuters) https://t.co/gIxkqS4twY
Prices in China keep falling, adding to the challenge for policymakers as they try to kick-start the country’s growth engine and defuse a simmering debt crisis https://t.co/lgpMTCJ5xu
"China’s economy slipped into deflation in July, and prices have been flat or fallen in every month since except August, leading economists to warn that prolonged deflation could undermine business and consumer confidence." https://t.co/QqBcgO4a45 https://t.co/muiTlHSyH3
🇨🇳China’s Economy Under Pressure as #Inflation Drops at Fastest Pace in 14 Years ⛔️CPI -0.8% y/y in Jan ⛔️PPI -2.5% y/y — 16th monthly contraction https://t.co/6eUSQIBuX7 https://t.co/3s70dWee0p
China’s consumer prices fell last month at the fastest pace since the global financial crisis, piling more pressure on the government to step up support for a stumbling economic rebound that’s roiling markets. https://t.co/tPblfYfmny
Consumer prices fell last month in China by the most since the global financial crisis in 2009, the latest sign that weak spending and a glut of output from factories and farms are forcing businesses to offer discounts. https://t.co/h8j9qxRiLj
In January 2024, China vehicle CPI is down 5.6% YoY, while sales are up 47.9%. https://t.co/3Q90rFlFAN
⚠️ CHINA'S CENTRAL BANK TO KEEP POLICY SUPPORT FOR ECONOMY (Reuters) China's central bank on Thursday said it would keep policy flexible and precise to boost domestic demand, while maintaining price stability, amid signs of a patchy economic recovery and rising deflationary… https://t.co/G0uf4pO70E
China’s central bank projects a modest rebound in consumer costs, as the world’s second-largest economy battles its worst streak of price drops in years https://t.co/wrbqiCVotq
China core CPI was UP 0.4% (and has been rising every month since the bounceback from the COVID slump in mid-2021). Headline CPI fell due to a 17% drop in pork prices. This isn't a "deflation" but a sectoral issue (lower food prices). China has big economic problems but NOT a… https://t.co/0NTG1Vs2m5
🔴 PBOC EXPECTS CHINA CONSUMER PRICES TO REBOUND MODERATELY.
🇨🇳China’s Economy Under Pressure as Inflation Drops at Fastest Pace in 14 Years The consumer price index dropped 0.8% in January from a year ago The producer price index fell 2.5%, marking 16 straight months of deflation for factory-gate costs Core CPI, which strips out… https://t.co/QYlaNt9ufD
🔴 PBOC REITERATES TO KEEP YUAN AT REASONABLE AND AT A BALANCED LEVEL.
CHINA: prints a #Quad4 Deflation report with headline INFLATION (CPI) down -0.8% y/y https://t.co/cgmEFpy6pC
Falling prices for food and electric cars in China, as well as 16 straight months of year-on-year declines in producer prices, raise concerns about the potential for a fall in the general level of prices: deflation. https://t.co/08bqDuGrhh
“The CPI data today shows China faces persistent deflationary pressure. China needs to take actions quickly and aggressively to avoid the risk of deflationary expectation to be entrenched among consumers” — Zhiwei Zhang, president and chief economist at Pinpoint Asset…
In January 2024, China experienced a 0.8% year-on-year decrease in consumer prices, marking the fourth consecutive month of decline, the longest streak since October 2009. This decline was worse than expected, with market forecasts anticipating a 0.5% fall. It represents the…
The deflation continues in China! The impact is not straight forward for western markets due to weakening trade ties, but asian markets should be impacted a lot. More -> https://t.co/BQCsh4tx96 https://t.co/FUR62eK4PL
“A multitude of indicators are now flashing red, signaling a perilous period ahead for China’s economy & financial markets...As deflation becomes entrenched in China, an increasingly heavy policy lift will be needed to rebuild confidence:” Cornell's Prasad https://t.co/h2bEPDfc9l https://t.co/1qbvdU16Ao
China’s consumer prices suffer steepest fall since 2009, adds to deflation woes https://t.co/f9Ox1259ez via @scmpnews
The latest ChinaDoom front-pager from the @FT. In fact econometric testing shows that deflation often does not lead to economic contraction and our fear of it is anecdotal and based on the depression. China shows this by growing ~5% annually while experiencing deflation. 🇨🇳 https://t.co/oJOhmvUmmf