Deflation looms for China amid Covid-19, property crisis: Survey

China faces increasing risks from deflation as demand crumbles under the weight of an ongoing property crisis and is threatened by continued Covid-19 restrictions - a stark contrast with other major economies, according to a private survey.

Companies reported the weakest growth in sale prices since the last quarter of 2020 in the three months through September, according to indexes compiled by China Beige Book International in a report out on Tuesday. That is despite wages and input costs picking up from the previous quarter.

CBBI, a provider of independent economic data, polled 4,354 firms during the period. "While nearly the whole world panics over surging inflation, the spectre of deflation looms over China, thanks to the demand-crushing effects of Covid Zero," said CBBI chief executive officer Leland Miller.