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China’s Struggles With Supply Glut Threaten to Extend Deflation

China’s intensifying deflationary pressure threatens to persist long after seasonal distortions fade away, unless the government drains excess capacity in the economy that’s putting pressure on prices.



China's deflationary pressure is intensifying due to overcapacity and a conservative monetary stance, potentially extending deflation into 2025. While Chinese authorities acknowledge the risk, addressing it is not a top priority due to other economic concerns.

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