Recent reporting from CCTV confirms that China is experiencing deflation amid weaker foreign trade activity. In detailed terms, food prices have slipped by about 1.7 percent, while prices for services have risen by roughly 1.2 percent, illustrating a mixed but overall cooling in consumer costs. This pattern marks a notable shift since the last period of deflation during the global financial crisis in 2008 to 2009, positioning the current period as a rare economic event in recent years.
On the trade front, annual figures show a clear contraction, with both exports and imports declining by 14.5 percent and 12.4 percent respectively. This broad-based demand slowdown points to softer external demand and challenges in domestic industrial activity, signaling a period of adjustment for manufacturers and trading partners alike.
China’s tourism sector is navigating a deep crisis even after borders reopened in early 2023 following a lengthy period of strict COVID measures. The rebound in foreign visitation has been slower than many expected, and the flow of international travelers remains well below pre-pandemic levels. Industry observers note that a combination of lingering travel hesitations, evolving global travel patterns, and lingering supply chain disruptions complicates the recovery for tourism-related businesses.
In assessments from the World Tourism Alliance, the sector is described as being in distress and depression. The alliance attributes the weak recovery to several factors, including the three-year closure of the country, shifts in logistics chains, and ongoing limitations in tourism infrastructure. The overall effect is a reduction in tourist arrivals and a slower return to the momentum seen before the health crisis, with ripple effects across hospitality, transportation, and local economies.
Analysts also reference external dynamics that could weigh on trade and growth, including the impact of sanctions-related measures on trade with the Russian Federation. While not the sole driver, these geopolitical developments add another layer of complexity to China’s economic environment, influencing commodity flows, pricing and broader trade relationships across regions.