Deflation is now evident in China, with consumer price growth stagnating and income levels dropping, risking increased economic turmoil and the need for substantial stimulus.
'We are definitely in deflation and probably going through the second stage of deflation,' says Robin Xing of Morgan Stanley, indicating dire economic challenges ahead.
The drop in entry-level salaries in key sectors like electric vehicles suggests that household spending may decline as residents expect continued price drops.
A Cheung Kong Graduate School of Business survey shows labor cost growth is at its weakest since COVID lockdowns ended, highlighting economic stagnation.
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