Once upon a time, children in Europe wondered how Australians managed to walk upside down. China is not at the antipodes but gives the impression of walking upside down compared to Europe and the US. While the US focuses on containing inflation, China grapples with driving prices up.
Production prices in China fell for the 20th consecutive month in May, while consumer prices rose slightly. Economists fear deflation will adversely affect economic growth and consumer morale if not addressed promptly.
Defusing Anger
To combat this, the Chinese government plans to boost exports and stimulate consumption through aid programs despite challenges from the US and Europe. Premier Li Qiang aims to resolve the real estate crisis and lower interest rates to stimulate consumer spending effectively.
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