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Is China’s at Risk for Deflation?

For the past two decades China has been growing at a remarkable pace year after year shocking economists and rewriting economic theory. It appears that the Bull Run has just about come to an end. According to the National Bureau of Statistics in Beijing the factory-gate prices fell for the 32 nd month in October. Likewise, consumer prices were also stagnant. Some economists are arguing low inflation, low capacity engagement, and high inventories may lead to deflation.  The Chinese government is debating infusing some of its own capital into the economy in much the same way as the U.S. and Europe. The methodology may be somewhat unique as expanding production without significant household consumption or willing international buyers can be difficult. China’s economy could be experiencing the first signs of “burn out” as consumers across Europe tighten their belts. As prices and products become cheaper there is some risk of deflation. Deflation is seen as a very destr