Jason Douglas of The Wall Street Journal reports consumer prices in China fell at the sharpest pace in more than 14 years. Douglas writes:
Deflation is becoming more entrenched in China, with consumer prices falling in January at their steepest pace in more than 14 years—a stark symptom of deepening economic malaise that spells trouble for the global economy.
The latest data suggest China faces a growing risk of slipping into a longer-term spell of falling prices that becomes harder to reverse the longer it lasts. […]
That means, according to many economists, that this spell of subdued growth and flat or falling prices will persist for a while, possibly for years, either until officials abandon their aversion to bigger stimulus or debts are finally worked off.
“The People’s Bank of China really ought to deliver stronger policy support,” said Carlos Casanova, senior Asia economist at Union Bancaire Privée.
Read more here.