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RE: LeoThread 2024-12-13 09:48

in LeoFinance3 months ago

Part 5/9:

Deflation is typically not a positive sign; it suggests a deficiency in consumer demand rather than an increase in productive capacity. The CCP has long been wary of rising consumer demand, given that domestic consumption accounts for a significantly smaller part of the economy compared to exports, primarily due to a variety of factors including currency undervaluation and low wages for workers.

Since the property sector began to falter in 2021, Chinese consumers have opted to save more, curtailing spending in anticipation of further instability. The precarious situation in the property market, where 75% of household wealth is tied up, leads consumers to adopt a wait-and-see approach rather than splurge on goods.