China's economy in the face of a disturbing deflationary spiral

China actively discusses with the United States. When the Empire is negotiating, it is because the balance of power escapes it. Inside, everything vacillates: prices drop, exports derail, consumption is died, the economy is slowed down. This giant seems to slide on a dangerous slope. If Beijing still hopes to restore its international image, it may be because inner, nothing is going round.

Consumption: an economy that flickering, a threat that settles in China

Deflation lurks in China. Three months in a row, consumer prices have dropped. In April, the CPI index fell from 0.1 %and that of production prices (PPI) of 2.7 %. This continuous drop is not just a statistical figure. She reveals Consumer loss of confidence. And when households stop buying, the whole economic building is shaken.

China is no longer this vibrant hive. Credit is more accessible, banks inject liquidity, but The homes no longer buy. For what ? Too many debts, a real estate bubble to burst, an uncertain job market. The Chinese citizen keeps his money, as we keep a candle in the event of an electricity failure.

Even food is affected. The price of food has dropped 0.2 %.

“” Consumers remain cautious about economic uncertainty», We read in the official report quoted by theSouth China Morning Post.

Despite the drop in prices, Fear prevails over envy.

Too much to sell, not enough buyers: the interior trap

Faced with exports slowed down by commercial tensions, China has released an unexpected card. She asks her manufacturers to redirect their products to the domestic market. An economic recycling that poses a problem: if no one wants or can buy, this maneuver is just making the bubble.

• -0.1 % : drop in the CPI index in April;
• -2.7 % : Fall of the PPI over a year, stronger decline in 6 months;
• +0.3 % : symbolic increase in prices in services;
• 0 % : real growth in several urban areas analyzed;
• +13.1 % : Bond of industrial production in January-February, followed by a net slowdown.

JD.com and Freshippo were mobilized to help sell the surpluses. But selling a commodity to a disinterested client remains a risky bet. CNBC warns ::

Deflation could worsen if the supply goes far beyond an anemic demand.

And this imbalance is seen to the stranger. In the United States, Chinese restaurants are struggling to stock up. Customs prices weigh the logistics channels. In China, high -end establishments are struggling to offer American beef. The SCMP underlines:

Chinese New York restaurants adjust their menus to compensate for the price increase.

Especially the dishes change, it is that the economy digests badly.

Recovery or sparadrap measures on open fracture?

The Chinese central bank drops rates. Targeted loan programs have been launched. The state supports certain key industries. Yet, The economic machine still coughs. These monetary injections are more like a dressing than a real surgical operation.

Big words are no longer enough. The consumer is waiting. He wants guarantees, not slogans. The fear of the future bridles consumption. And the Chinese economic miracle is now like a poorly executed magic turn.

Beijing also bets on logistical reorganization. Encourage local sale is trying to absorb outdoor shocks. But then again, the strategy vacillates. Folding down is not a lasting solution. An economy based on export is not reversed by decree.

The situation recalls a proverb: we do not empty the ocean with a ladle. And during this time, the nets remain empty in Chinese kitchens, as in economic projections.

China is looking for solutions. According to a BlackRock analyst, she could turn to cryptos or gold as a stability reserves. And after all, is it not already the second largest Bitcoins holder in the world? What seemed to be a fad perhaps becomes a strategy.