China enters deflation as recovery flops and demand falling

[serveria.com]

Weird, why do you think Bitcoin price will drop because of deflation? Could you elaborate on that? Also not clear to me why Bitcoin investors should all of a sudden sell their holdings at a loss?  

Read my last quote   .
 you can explain to me if you know better, I mean no offense, perhaps we all learn new things every day.

Yeah, sorry, missed your last post in this thread. Still, it didn't become more clear to me after I read your explanation but in fact I got even more confused. 

In your initial post you mentioned "many people are going to sell their Bitcoin because the price will definitely drop". Frankly, I don't see how fiat deflation can affect Bitcoin price. I'm not an expert, but from my experience of over a decade long hodling, neither inflation nor deflation doesn't affect Bitcoin much.

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[panganib999]

Things would've been different for China had they not shot themselves in the foot. They literally forced their working class to commit suicide especially during the heights of the COVID pandemic. They failed to perform rapid and righteous response as well during that same timeframe and scenario. Ultimately they made it so that the country couldn't trust them anymore, the elite class which basically holds the Chinese economy on their shoulders are slowly taking their riches away and are putting it into other banks cause China's economy's about to go into the shitbox anyway. And with them slowly pulling out the problem of deflation becomes even more apparent. Oh well, whatever! It's not like you could topple a superpower like China overnight by undermining their economy!

[Ulven]

You are correct that there is a difference between deflation of useful items and the detrimental effects of decreased earnings or salaries. Depending on the situation, inflation and deflation can have different outcomes. Consumers may profit when prices decline as a result of better productivity or higher supply. But deflation can cause economic problems if it's fueled by weaker consumer demand and lower salaries. Beyond only pricing changes, the broader economic ramifications must be taken into account.

[STT]

China has a falling working population, so its not totally out of the blue for this to be a possibility.  Its also going to reflect badly on the world where it exports alot of its goods, poor demand would seem to suggest wider problems beyond China borders.   China drastically reduced its population growth some decades back by the harshest possible methods, they have altered that policy now but are unable alter demographics positively just as easily as they reduced population previously.   

[davis196]

I don't understand what is happening right now in China.
Most of the info I get about the Chinese economy is just pure propaganda about how the economy is growing on a massive scale and China becomes wealthier day after day. I guess that the end of the lockdowns didn't bring a fast economic recovery. Maybe China is still suffering from the side effects of the pandemic and the lockdowns.
Yes, I know that both inflation and deflation are bad for the economy and finance. The only way to stop them is to stop the money printing machines(which is impossible). That's the only way for the the business cycle will get back to normal.
There's point bitching and complaining about how deflationary Bitcoin is and that nobody uses BTC to buy goods and services. Just choose an altcoin, which has less scarcity. Bitcoin is "digital gold", period.

[DrBeer]

I don't understand what is happening right now in China.
Most of the info I get about the Chinese economy is just pure propaganda about how the economy is growing on a massive scale and China becomes wealthier day after day. I guess that the end of the lockdowns didn't bring a fast economic recovery. Maybe China is still suffering from the side effects of the pandemic and the lockdowns.
Yes, I know that both inflation and deflation are bad for the economy and finance. The only way to stop them is to stop the money printing machines(which is impossible). That's the only way for the the business cycle will get back to normal.
There's point bitching and complaining about how deflationary Bitcoin is and that nobody uses BTC to buy goods and services. Just choose an altcoin, which has less scarcity. Bitcoin is "digital gold", period.

China's problem, quite massive, and the sad thing is no one knows how to solve it. It has a huge domestic debt, and it is tied to the currency. Huge, and growing external, also incidentally in currency, falling supplies to Western markets, and the loss of technological investments.... While the government of the Celestial Empire is trying to "export" inflation and problems through the megaproject "replacing the dollar with the yuan, for those who do not have a working brain" - these are the BRICS countries, and some other "dollar-haters", which China is using in full force.  The question is - will this project solve the problems ?!! Partially yes - idiots will take the surplus yuan and then use it to buy billions of dollars worth of junk. But then what?! Will China be able to become a transit, beneficial to China's economy, a zone of dollar separation, from transactions amongst unfortunate "BRICS" type alliances and the outside world via China ? Not a fact...
The problem is that China's economy is export-oriented and dependent on the Western consumption market, as well as on technology and investment. And the nuance is that in today's world, China has decided to play MegaCountry. But it forgot that it is totally dependent on what I have listed. And it cannot replace it on its own, given the fact that Western companies, technologies and markets - China is LOSING ! And this is against the background of INTERNAL economically powerful negative processes !

[letteredhub]

A mass layoff has been done by Chinese companies that have branch office in my country since May this year, most the workers are software developer and customer service who are working remotely, since the salary in here is relatively lower than in China. I guess if a country as big as China are having deflation it will affect other country too.

In the phase of deflation in an economies companies turn to layoff as a way to mitigate losses because they wouldn't want thete expenditure to extremely exceed their profit as demands for good and services are no more in the rate it were. But bethinking this, I don't think this deflation would last for a meaningful time for it to affect other countries around the world, more so, china's socio-cultural economies has a lot of dissimilarities with many countries of the world even with those that shares proximity in border.

[stompix]

I don't understand what is happening right now in China.

It's the result of a lot of factors that at first glance seemed like of no major long term concern, so let me make a quick list of it
- the hukou system, great in theory, bad in practice over a long period of time showing its effect, making it impossible of a lot of internal migrant workforce to actually get involved in sectors where it's needed desperately now
- the single child policy, no need for an explanation here
- different mentality though generations, unlike Western elders in a lot of eastern countries are not inclined to spend, when this population starts becoming dominant you're in a lot of trouble, see the deflation Japan is experiencing.
- the lockdowns, which basically showed every single company that it's not a great idea to import iron from Australia, ball bearings from Germany, chips from Taiwan, and rubber from Malaysia to a factory in China to make the product that will be shipped for assembly in Mexico before entering the US market for a 3-5% in cost reduction so, way better to make it all closer to home.
https://www.axios.com/2023/07/12/us-top-trading-partner-mexico-china
- the Russian war, again has shown companies it's not a great idea to have a ton of business in countries where the next day you get everything seized by a madman
https://asia.nikkei.com/Economy/Foreign-investment-in-China-falls-to-lowest-level-on-record
- the final factor is that China, well, as one economist said, became old before becoming rich, being heavily dependent on cheap labor for its economic expansion it hasn't managed to replace that other than a real estate bubble, so now it doesn't have cheap manufacturing, it doesn't have the consumer spending, no investors and little tourism compared to its size, all is powered by state spending, which can't go indefinitely

Of course, it doesn't mean China will collapse or anything else, neither the Great Depression nor the 2008 crisis has proven fatal to any country, but if it enters a solid recession we're all going to feel it, and it's not going to be pretty. Worse for them of course than for us but still!