China may be headed for a lost decade

China’s consumer sector fell into deflation and factory-gate prices extended declines in July, as the world’s second-largest economy struggled to revive demand and pressure mounted on Beijing to release more direct policy stimulus.
Anxiety is rising that China is entering an era of much slower economic growth akin to the period of Japan’s “lost decades”, which saw consumer prices and wages stagnate for a generation, a stark contrast to the rapid inflation seen elsewhere.

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