Glut of Chinese Goods Causes Global Deflation
Glut of Chinese Goods Pinches Global Economy
Plants in China keep producing as growth falls, fueling deflationary pressure world-wide
「DONGYING, China— Liu Zijun built a thriving tire-manufacturing business when China’s economy was roaring ahead. But when China’s growth weakened, he had to cut prices to keep his business afloat.
Now the pain felt by industrialists such as Mr. Liu is reverberating across the globe, showing how China, once the world’s most reliable source of growth, is adding to deflationary pressures world-wide…….
A fundamental mismatch of supply and demand haunts other industries. In 2013, Chinese authorities named 19 sectors plagued by overcapacity in the country, including cement, aluminum, copper, chemical fiber and paper.
“This has happened again and again in markets, but this was on a super scale,” said Daniel Yergin, vice chairman of the Colorado market-research firm IHS Inc. “People invest, but they don’t see what everybody else is doing at the same time.”