• nekandro@lemmy.mlOP
    link
    fedilink
    arrow-up
    42
    arrow-down
    4
    ·
    7 months ago

    China, producing cheaper goods that allow consumers to get the same quality of product for less money, thus leaving more money in people’s pockets.

    The Financial Times.

        • sik0fewl@lemmy.ca
          link
          fedilink
          arrow-up
          4
          arrow-down
          6
          ·
          edit-2
          7 months ago

          I don’t think you were talking about me, but even if you were that’s not very nice.

          The original commenter was suggesting that this is great for the US and maybe other western states, but I was noting that any benefit to the west will be at the cost of the Chinese.

          I’m not upset that the west will benefit (I’m from Canada), but it’s pretty cunty to reduce a global economics story down to how it will benefit just one nation.

          Edit: I should add - deflation is probably bad for China and Chinese people. It’s not driven by growth, but by lack of spending.

          • freagle@lemmygrad.ml
            link
            fedilink
            English
            arrow-up
            6
            ·
            7 months ago

            Supply/demand. If you overproduce, prices come down

            Supply chain costs. If you increase shared infrastructure, costs come down, and if you have SOEs, prices come down.

            Deflation is not exclusively driven by lack of spending.

            • sik0fewl@lemmy.ca
              link
              fedilink
              arrow-up
              3
              arrow-down
              3
              ·
              7 months ago

              You’re right that I’m not an expert in economics. Can you explain why this is good for China? I’m honestly interested and willing to learn.

              • carl_marks[use name]@lemmy.ml
                link
                fedilink
                arrow-up
                8
                ·
                edit-2
                7 months ago

                For the Chinese economy, it signifies, as other commenters have noted and as pointed out in the article, the presence of a highly efficient Chinese industrial base capable of meeting not only domestic demand but also exporting increasingly sophisticated manufactured goods. While oversupply might trigger deflation domestically, the (planned) inflation target of around 3% for 2024, as suggested (and confirmed) by the article, indicates that China is successfully boosting exports instead. This indicates their ability to acquire capital for reinvestment, further enhancing their economy.

                Internationally, for consumers, this is positive news, especially in the post-COVID and Ukraine conflict period where inflation has pushed up prices, making goods more expensive. The availability of competitively priced Chinese goods, as the article terms it, “exporting deflation,” therefore benefits consumers worldwide.

                However, on an international scale, this trend could potentially pose challenges for other nations trying to develop competitive domestic economies. It creates significant pressure within the capitalist mode of production, potentially making it difficult for other economies to compete effectively. Hopefully forcing them change the mode of production, realistically they will likely go the protectionist route.