Deflation threat looms in China as GDP deflator contracts for second consecutive quarter

Authorities in China are urged to take a more forceful approach to stimulus to combat this threat

A note from Morgan Stanley, writing in the Financial Times.

The FT is gated but I've dug up this that conveys the message.

The GDP Deflator (a broad measure ion inflation) which is the broadest measure of prices in a country, has contracted for two consecutive quarters, and now stands at -1.4%
When adjusted for deflation, China's real interest rates are pushed higher
"If deflation continues to eat into these, companies will cut wage growth, creating a vicious 'loop' of even weaker aggregate demand and deflationary pressures,"

And goes on to argue that authorities in China need a much more forecefula ppraoch tos stimulus.