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.
More at the link above.
Last weekend: