HEADLINE: China's Deflationary Cycle: A Consequence of Overproduction and Centralized Control GUEST NAME: Anne Stevenson-Yang SUMMARY: China is mired in a fearful deflationary cycle driven by chronic overproduction and a government unable to shift from s
The John Batchelor Show
John Batchelor
4.5 • 2.8K Ratings
🗓️ 18 September 2025
⏱️ 9 minutes
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Summary
HEADLINE: China's Deflationary Cycle: A Consequence of Overproduction and Centralized Control
GUEST NAME: Anne Stevenson-Yang
SUMMARY: China is mired in a fearful deflationary cycle driven by chronic overproduction and a government unable to shift from supply-side investment to stimulating consumption, perpetuating a "race to the bottom" under CCP leadership. China faces widespread deflation, causing consumer uncertainty and stemming from government-backed overproduction. The CCP leadership pours money into factories to meet GDP targets, despite overbuilt infrastructure and property. This "involution," or economy eating itself, continues due to a lack of innovative solutions and reluctance to cede economic control.
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| 0:00.0 | Building a coffee business? |
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| 0:17.9 | Visit sumup.co.uk to learn more. |
| 0:24.0 | This is CBSI on the world. I'm John Batchel, watching the People's Republic of China. |
| 0:28.9 | Gordon Chang at Gordon-Gy-Chang. Headline at CNBC, doing business in China, question mark, |
| 0:35.3 | factor in deflation subheads. |
| 0:38.6 | Chinese companies are facing widespread deflation, which has left consumers uncertain |
| 0:43.3 | about the future and hunting for value. |
| 0:47.2 | The least of it, Gordon. |
| 0:48.7 | What is deflation that is so fearful that it's a headline right now at CNBC? |
| 0:55.5 | Well, deflation is a general decrease in prices, and China is suffering it right now, |
| 1:00.7 | as we see from the price data for August. |
| 1:03.4 | The reason why it's so fearful, fearsome, is because when people believe that things will get cheaper in the future, they hold off purchases. |
| 1:14.4 | And that drives an economy further down. And we're seeing that in China now. And that's why countries |
| 1:20.6 | around the world target mild inflation so that they can get people to continue to consume. |
| 1:27.4 | China right now is in a deflationary cycle, as we see from both consumers. so that they can get people to continue to consume. |
| 1:30.1 | China right now is in a deflationary cycle, |
| 1:33.0 | as we see from both consumer and producer prices. We welcome our colleague, Anne Stevenson Yang, |
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