Stagflation in China is a ‘Very Real’ Risk in the Next Couple of Quarters, Says Analyst

Oct 28, 2021

Stagflation in China is a "Very Real" Risk in the Next Couple of Quarters

Stagflation is "very real" in China over the next several quarters, according to an analyst, as factory gate costs climb at a faster rate and economic development is hampered by a power shortage.

Stagflation is a term used to describe a situation in which the economy is experiencing both stagnating activity and rising inflation. The phenomenon was initially noticed in the 1970s, when an oil shock resulted in a prolonged period of rising prices but rapidly declining GDP growth.

In China, the producer price index increased 10.7% in September compared to the same month the previous year, the quickest rate since data collection began in October 1996. Meanwhile, widespread power outages have caused several major banks to lower their GDP predictions for China.

According to Charlene Chu, senior analyst for China macro-financial at Autonomous Research, this predicament has made it impossible for Chinese authorities to significantly stimulate the economy.

Chu said on CNBC's "Street Signs Asia" that stimulus could increase energy consumption and exacerbate current power shortages. At the same time, she predicted that factories forced to shut down for several days a week owing to the power outage will continue to stymie economic growth.

"As a result, I believe we are in a scenario where there are many things weighing on growth right now that are unlikely to go away anytime soon, and we are unlikely to see substantial Chinese stimulus in the next months," Chu added.

"That will be a different dynamic for the globe to adjust to," the expert continued, saying that the world has grown accustomed to China boosting its way out of various economic binds.

No 'crisis of confidence' in property

China's economy is facing a number of difficulties. The third quarter's 4.9 percent year-over-year increase was the slowest in a year.

Aside from the power shortage, which has hampered industry output, a decline in the real estate sector has also slowed growth.

Evergrande and other developers have failed to repay their debts, bringing problems in China's real estate market to the fore in recent months. This came after Beijing launched a drive to limit property developers' excessive borrowing.

The decline in the real estate sector, according to Chu, has "severely" harmed China's economic growth. However, according to the expert, the country has not yet reached a stage where confidence in the primary property market is eroding.

"I don't believe the authorities are attempting to create a trust problem throughout the entire developer sector," Chu added.

Subscribe Our Newsletter

Robinhood Reports Earnings Today — Here's What To Expect
Robinhood Reports Earnings Today — Here’s What To Expect

Robinhood Markets (HOOD) is slated to announce fourth-quarter earnings after the bell on Thursday, despite the fact that the commission-free trading platform's shares have been trading at all-time lows.

Companies
Rivian Is ‘The One’ That Can Challenge Tesla: Morgan Stanley
Rivian Is ‘The One’ That Can Challenge Tesla: Morgan Stanley

Electric car maker Rivian (RIVN) has been publicly traded for over a month now, with an initial offering price of $78 per share. The firm's equity price soared to more than $165 shortly after the IPO but has subsequently dropped to slightly over $110 today.

Companies
B2BROKER Liquidity B2BROKER Liquidity
Sponsored
Constantine

AI in Finance: A Game-Changing Trend Shaping the Industry
Discover how AI transforms finance, from risk management and fraud detection to algorithmic trading and robo-advisors. Explore key trends shaping the industry.

discover
Best Paying Jobs in Real Estate Investment Trust

Nato

How to Find the Best Paying Jobs in Real Estate Investment Trust

Considering a career in real estate? Look beyond traditional paths! Explore the best paying jobs in Real Estate Investment Trust.

Investing
Contact us bg

Contact Us

Contact the Liquidity Provider
for any questions and advertising inquiries

    Please fill out this contact form to get in touch with us

    / 3000

    By clicking “Get in touch” button, you agree to the privacy policy

    Successful!
    Thank you for your request.
    We will contact you shortly.
    Close

    Hazem

    5 Reasons Traders Are Switching to Perpetual Futures

    5 Reasons to Switch to Perpetual Futures

    Constantine

    Top 3 Liquidity Challenges Facing New Exchanges and How to Solve Them

    Top 3 Liquidity Challenges Facing New Exchanges Today

    Constantine

    Financial Planning in the Cryptocurrency Era — Master Crypto and Digital Asset Strategies

    Financial Planning in the Cryptocurrency Era

    Hazem

    Best Platforms to Trade Perpetual Futures in 2025

    Best platforms to trade perpetual futures in 2025

    Alex

    Top 10 Fintech Website Development Agencies for 2025

    Best Fintech Website Development Agencies for 2025

    Сonstantine

    Internal vs External Range Liquidity In ICT Trading Explained

    Internal vs External Range Liquidity In ICT Trading

    Constantine

    Portfolio Backtesting — Tools, Metrics, and Methods Explained

    Portfolio Backtesting

    Сonstantine

    ICT Trading Explained: Smart Money Concepts, Tools and Setups

    ICT Trading Explained

    Сonstantine

    CFD Trading Strategies: A Practical Guide to Risk and Execution

    CFD Trading Strategies

    Alexander

    What is a Fair Value Gap? A Guide to Trading Market Imbalances

    What is Fair Value Gap

    Vitaliy

    Triangle Patterns in Trading: Mastering Ascending, Descending & Symmetrical Strategies for Maximum Profit

    Triangle Patterns in Trading: Ascending, Descending & Symmetrical Guide

    Alexander

    What Is COTI? Payments, Token & Price Prediction

    What is a COTI coin

    Constantine

    Best Copy Trading Software in 2025

    Best Copy Trading Software in 2025

    Alex

    What Is an AI Agent? The Future of Finance Explained

    AI Agent Explained

    Constantine

    How to Start a Liquidity Provider Business?

    How to Start a Liquidity Provider Business

    Constantine

    How to Start a White Label Brokerage?

    How to start a white label brokerage

    Constantine

    How to Start a Multi-Asset Brokerage?

    How to Start a Multi-Asset Brokerage

    Hazem

    Crypto Ransomware – How They Happen and How to Avoid Them

    Crypto ransomware explained

    Constantine

    Best Web3 Browsers in 2025

    Best Web3 Browsers

    Constantine

    Best DAO Projects in 2025

    Best DAO projects in 2025

    Alexander

    Crypto Nodes That Pay: Your 2025 Guide to Top Passive Income Opportunities in Crypto

    crypto nodes that pay

    Alex

    Pi Network: Scam or Groundbreaking Crypto? The Full Analysis

    Pi Network Explained

    Constantine

    Triple Net Lease: Meaning, Benefits, and Strategies Explained

    Triple Net Lease

    Constantine

    Hanging Man Pattern: How to Identify and Trade It Effectively

    Hanging Man Pattern
    liquidity-provider-logo
    • News
      • Stock Market Forecast
      • Stocks
      • Banks and Finance
      • Companies
      • Crypto
      • Forex
      • AI
      • Technology
      • DeFi
      • NFT
    • Articles
      • Crypto Payments
      • Trading
      • Crypto Exchange Business
      • Forex Business
      • Fintech
      • Liquidity
      • FinTech Awards
      • Blockchain
      • Investing
      • NFT
      • DeFi
    • More
      • Videos
      • Liquidity Providers List
      • Crypto Payment Providers
      • White Label Brokerage Platforms
      • Broker CRM Platforms
    [email protected]

    © 2024 Liquidity Provider. All Rights Reserved

    Privacy Policy Cookie Policy
    This site is registered on wpml.org as a development site. Switch to a production site key to remove this banner.