Source: Bloomberg
The Chinese economy has been suffering from deflation since last year. Now the latest signs show that China is entering spiral deflation, which may worsen the prospects of the world's second largest economy and cause the government to immediately adopt policy policies.Act.
The data announced on Monday confirmed that when the income decline, in addition to food prices, consumer prices in most areas in the economy have not increased.
Bloomberg Economic Research and Bank of France, Bank of France, etc., said that the generalized index of domestic product (GDP) definition index that measures the overall economic price has fallen for five consecutive quarters, and it may last until 2025.This will be the longest duration since the data in 1993.
"We are definitely in a shrinking, and may be experiencing the second stage of shrinking," said when Morgan Stanley chief Chinese economist Xing Ziqiang mentioned the evidence of salary decline, "Japan's experience shows that the longer the shrinking is dragging, the longer the shrinkage is dragging onIn order to break the challenges of debt-shrinking, the more stimulating measures in China will eventually need. "
China's danger is that in view of the reduction of expenses due to the decline in wages, or delaying purchase due to the expected price of further decline, the shrinkage may fall into the snowball effect.Corporate income will be affected, which will inhibit investment, leading to further salary reduction and layoffs, and households and enterprises fall into bankruptcy.
Civil surveys have shown that this has emerged.A survey of Caixin Think Tank and Digital Lianlian Mingpin showed that in the government -supported economic field -such as electric vehicle manufacturing and renewable energy, the employment salary in August was nearly 10%compared with the peak of 2022.
A survey on 300 company executives showed that the increase in labor costs last month has reached the lowest since April 2020.
Another data recruited by Zhilian shows that the average recruitment salary of the 38 major cities in the second season has almost no change, which is in sharp contrast to the 5%increase in the first two years of the epidemic.
Japan once experienced such a cycle (began in the 1990s), when it was called "lost decades" -the serious stagnation after the real estate and financial market bubbles were crushed.
Although Chinese officials tried to curb discussions about the tightness of the currency and remind analysts to avoid using the term, the shrinkage has begun to enter a public dialogue.The former president of the People's Republic of China, Yi Gang, said last week that China should now focus on the pressure of contraction.This is a well -known person in China that rarely acknowledges that price declines are threatening prospects.
In the group discussion of the Bund Financial Summit held in Shanghai last Friday, Yi Gang called for a positive fiscal policy and supporting monetary policy, and said that the focus should now be focused on the pressure on the shrinkage.He said that China's current focus should be that the GDP reduction index will turn right in the next few seasons.
So far, officials have not obviously deviated from the past, that is, to encourage production, rather than to solve the problem of weak demand by increasing measures such as increasing government public service expenditure and consumer subsidies.
The core inflation rate of China, which does not include food and energy, has cool down in August, the weakest for more than three years.Tongshu expectations impact the market, promote the rise in bond prices, and the yield fell to a record low, which has aroused concerns about the high risk of bank interest rates.
The growth rate of China's nominal GDP reflects the weakness of prices. In the second quarter, the growth rate was only 4%, which was far lower than that of about 5%of China's actual economic growth goals this year.
Luo Zhiheng, chief economist of Yuekai Securities, said in the report earlier this month that in the context of the continued sluggish price, the role of nominal GDP growth rate has significantly enhanced.Government income affects market expectations and confidence.
Jack Li, a 37 -year -old aluminum product sales engineer in South China, found that when he didn't have more eggs when he ate breakfast, he fully realized the impact of the shrinkage.
Last year, market demand sharply forced his company to cut prices and loses money to sell products.His income was originally over 1 million yuan (141,000 US dollars), and now less than one tenth, he has a headache for his mortgage.
Liu, who lives in Foshan, Guangdong, said, "Domestic does not recognize shrinkage now."He has 1,100 fans on Xiaohongshu, and he often refers to the danger of currency tightening in Xiaohongshu.
The speed of deteriorating prices in China surprised the market.
In the past four months, the inflation rate has been lower than expected, and the CPI increased by only 0.6% in August -the main reason for the growth is that food prices have increased by 2.8%.The core CPI last month rose only 0.3%, less than 1%for the 18th consecutive month.
