The Peter Zeihan Podcast Series China Faces Deflation as Economy Stutters || Peter Zeihan
Oct 23, 2024
Explore the economic turbulence facing China, with a focus on deflation and a shrinking consumer base. The podcast dives into the challenges of low birth rates and historical oversupply, illustrating how these factors threaten stability. It also draws parallels to Japan's past struggles, emphasizing the importance of consumer spending in revitalizing the economy. Additionally, potential geopolitical tensions in the Middle East hint at possible oil crises, adding another layer of complexity to China's economic landscape.
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China's Stimulus and Japan's 1990s
- China's stimulus programs resemble Japan's in the 1990s, addressing demographic issues with monetary policy.
- This approach failed in Japan and is unlikely to succeed in China due to worse demographics.
Deflationary Spiral
- Deflation arises from oversupply exceeding demand, leading to falling prices and delayed purchases.
- This worsens the supply-demand imbalance, causing industrial collapse and job losses.
China's Demographic and Economic Challenges
- Increasing demand is difficult in China due to an aging population and low birth rates.
- Destroying supply, the other option to combat deflation, clashes with China's oversupply-focused development model.