China is stuck in deflation that is damaging to the economy. Before the turn of the year, consumer prices fell for the third month in a row – by 0.3 percent. Domestic demand is weak and the crisis in the real estate sector is weighing on the economy. Exports also fell in 2023. Observers assume that the government and the central bank will take short-term measures to stimulate demand. The borrowing costs for medium-term credit injections might be reduced as early as Monday.
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