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February 24, 2024 | China Exporting Deflation To The World

Danielle Park

Portfolio Manager and President of Venable Park Investment Counsel ( Ms Park is a financial analyst, attorney, finance author and regular guest on North American media. She is also the author of the best-selling myth-busting book "Juggling Dynamite: An insider's wisdom on money management, markets and wealth that lasts," and a popular daily financial blog:

Consumer prices in the world’s second-largest economy fell 0.8% in January compared with a year earlier–the most significant deflation in over a decade.


With demand weak at home and inventories piling up, Chinese producers have the incentive to dump excess goods onto world markets, and they are.

Chinese export prices have dropped steadily since late 2022 and were -8.4% year-over-year in December (customs data, shown on the left).

China is the largest trading partner for many countries and tends to lead price trends in other exporters that compete for business. See Cheap Chinese Goods are Becoming a Costly Problem. Exhibit A: Hong Kong.

The opposite of what happened during the pandemic, deflating prices and weak demand for finished goods tend to reduce corporate profits.

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February 24th, 2024

Posted In: Juggling Dynamite

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