WSJ reveals vicious circle of problems in China's economy
China's economy faces overcapacity.
Companies continue to ramp up production amid plummeting prices, creating a vicious cycle of economic problems.
Buyers are also delaying purchases in anticipation of further price falls, the Wall Street Journal article points out.
Penelope Prime, founding director of the China Research Center, a think tank, called what is happening in the economy a vicious circle.
In November, the price of Chinese products appeared to continue to fall after 26 consecutive months.
The consumer price index showed a minimal increase of 0.2% year-on-year in November, which is abnormal for the level of China's economy.
Among the population, as emphasized, expectations of low prices are becoming increasingly ingrained, which are difficult to change.
Chinese authorities have announced their intention to change monetary policy in order to increase demand and stabilize prices.
