As Discussions of Deflation Flood China’s Internet, Expert Warns of ‘Financial Idling’

A customer shops for vegetables at a supermarket in Fuyang, in China's eastern Anhui Province, on Oct. 14, 2022. STR/AFP via Getty Images

China’s online platforms have been inundated with conversations about deflation for the past month. A financial expert pointed out that China is not a market economy, and applying Western economics to assess it is difficult.

Moreover, the expert said that “financial idling” is a problem that must be dealt with; otherwise, the economy will continue to worsen.

Deflation

On April 20, Zou Lan, director of the Monetary Policy Department of the Central Bank of China, declared at the central bank’s first-quarter press conference that there is no basis for long-term deflation or inflation in China.