When two core indicators of Chinese inflation turned negative this week, alarm bells rang as the world’s second-largest economy started sliding into deflation. According to Joe Biden, China’s economy is a “ticking timebomb”.
The US president’s comments followed official data from China showing that July’s consumer prices index fell by 0.3% compared with 2022, while the producer prices index fell by 4.4%. It is the first time that both figures have been negative since November 2020, when the global economy had all but juddered to a halt during the peak of the Covid-19 pandemic.