This is John Batch for a conversation with colleague Anne Stevenson Yang about the deflation story in China,

moving people to game the system. The deflation is offset the government believes by giving away

discounts, giving away money, so people will shop.

However, that leads to what Anne is about to describe as an ability to make money all day

long by buying and selling from yourself and gaining points on credit cards.

Here, Anne describes it in total.

This is going on in China right now in order to defeat deflation or at least take advantage of deflation. More of this tonight.

Ann? Yeah, so you buy stuff from one company and sell stuff from the other company

and you send the money back and

forth between your own two bank accounts, but use credit cards for the transactions, which you

pay off that same day. And the credit cards get points, like to buy hotel rooms or something

like that. And then you sell the points so that people who otherwise would have to pay,

you know, 20,000 points for a hotel, or let's say 5,000 points for a hotel room in Hainan,

get to pay, you know, X amount and use the 5,000 points at a discount.