The News
Inflation in China rose just 0.1% year-on-year in December, intensifying worries that the world’s second biggest economy will fall into deflation.
Sky-high debt, concerning levels of unemployment, and a flailing real-estate market have weighed on overall economic growth. In recent months, deflation has risen among the list of worries, a potentially crippling issue in which consumers hold off on purchases because they believe prices will fall, further exacerbating economic woes.
In part, the issue may be down to the country’s political system, a renowned economist of modern China argued in The Wire: “Social engineering through government diktat stands in sharp contrast to the incentive-based, free-wheeling, individualistic spirit that shapes human behavior and consumption patterns in the West.”
