Why China’s Deflation Is More Dangerous Than High Inflation | WSJ
730,988
Published 2024-03-05
Like Japan in the ’90s, Beijing is also experiencing a real estate crisis. So how could this affect the U.S. and the rest of the world?
WSJ looks at Japan’s “lost decade” to explain why China’s economy is struggling and what it means for the global economy.
Chapters:
0:00 China’s economy
0:31 Japan’s “lost decade”
2:30 Deflation in China
3:56 Impact on the U.S. and the world
4:36 China’s response to deflation
News Explainers
Some days the high-speed news cycle can bring more questions than answers. WSJ’s news explainers break down the day's biggest stories into bite-size pieces to help you make sense of the news.
#China #Economy #WSJ
All Comments (21)
-
when you're poor inflation bad deflation bad existence bad
-
Prices can’t go down because then people get laid off, prices can’t go up, because people get laid off. I think the companies and their expectations of never ending profit increases are the problem
-
"Deflation is bad because it's not profitable for capitalists" There. Summed it up for you.
-
At 3:15 the graphs are very irritating since it isn‘t the same scale. Be aware of it because it would not look as bad as it does if they were equally scaled
-
The dominating class does get wealthier when everything is more expensive
-
Oh I get it, people having impulse control and saving money for later = bad for companies and “deflation”. Who is it bad for again?
-
prices go down and wages go down. what's the problem with deflation? it's the problem only for people with debts, assets, and banks.
-
Deflation is good for fixed income earners.
-
Economists worried, normal people happy.
-
Homes are for staying, not for speculation. Price drop benefits home buyers at the expense of speculators and developers. Secondary sales volumes are up although values are down. Developers are encouraged to build government subsidized homes going forward. Evergrande could not get local financing a few years ago so issued foreign bonds so its bankruptcy hurt mainly the foreign speculators.
-
Cheaper prices are bad? Stagflation is the worst thing.
-
Yes the Wall Street journal wants us to be worried about slower growth and lower prices…things that would be good for the planet, and good for regular people, but bad for billionaires. Mmkay
-
Deflation is the natural state of the economy as technological advancements remove inefficiencies in production, resulting in more supply at cheaper costs. Central banks offset this deflation with money printing resulting in the redistribution of wealth from everyone to the ultra-wealthy since they are able to access the newly printed money before everyone else. This is known as "the cantillon effect" described by economist Richard Cantillon.
-
falling prices benefit society. People are able to afford their life.
-
In the US where everything is always getting more expensive and wages aren't keeping up, this doesn't sound much worse.
-
Some deflation was necessary stop putting your portfolio above society 100% of the time
-
despite the lost decade in Japan, is that country really doing so bad all these years?
-
Toyota camry price has not come down.
-
Can someone explain to me how a moderate (2-4%) inflation in the cost of goods in an economy is considered a good thing in general but a moderate deflation of that same metric is considered dangerous ? Shouldn’t the cost of goods and service also occasionally go down as the market responds to various things
-
Stability and equality are more important than growth.