The majority of countries around the world are struggling with inflation, but not China. China was able to develop its economy well this week. The good development of China’s economy has led financial experts to estimate that the country will soon experience deflation. The potential for China deflation has made many companies around the world wary. According to CNBC, Beijing’s GDP grew 6.3% last year. Even though the expected GDP from Beijing at that time was 7.3%. The announcement of the occurrence of deflation will be made after a longer observation of all aspects of the economy.

Impact of China Deflation

Deflation itself has a significant impact on other countries and on China. The first impact of this is the decline in prices that occurs within China. When deflation occurs, people tend to reduce their purchasing power. This trend makes businesspeople confused because many of their investments have experienced a decline in profits. As a result, many of the various types of investments are retained. It is not uncommon for large companies to lay off several employees because of declining property prices. The problem is that the impact of dismissing employees will occur not only in several Chinese companies but also in companies in other countries.
There is already evidence that the property sector has experienced stable prices. Then proceed with property prices, which had experienced a decline. Even though the property sector has always been a mainstay for people in many countries, it will continue to benefit. Of course, the impact of this deflation will also harm the people who make policies. Policymakers need to rearrange the policies that have been made so that the economy remains stable. It is not surprising that China is also trying to stop the economic fall due to deflation. What’s more, the decline in population also does not contribute well to avoiding deflation. Based on QZ, China’s inflation will be at 2% by the end of this year. Anticipating the impact of deflation, many debtors are paying off their debts. In other words, neither massive deflation nor inflation is good for the country or the world. Moreover, China has a broad impact in the field of global trade.

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