China’s Deflation Is Led by Goods, Adding Trade-Tension Risk
- Export-price drop may stoke EU, US competitiveness concerns
- Nomura sees deflation persisting into 2024 on producer prices
China’s investment in manufacturing grew 6.5% in 2023, according to official data.
Photographer: Gilles Sabrie/BloombergThis article is for subscribers only.
China’s deflation was driven by falling prices in its manufacturing sector last year, fresh data showed on Thursday, adding to the risk of trade tensions with the US and Europe amid a major ramp-up in Chinese industrial capacity.
China’s GDP deflator, the widest measure of prices across the economy, was negative 0.6% in 2023, the steepest annual decline since the late 1990s, according to Bloomberg calculations based on data from China’s statistics bureau. Among sectors, manufacturing showed the biggest price drop, at 3.2%, Bloomberg calculations show.