SPILLOVER EFFECT

AND DEFLATION IN
CHINA
 SPILLOVER EFFECT

Spillover effect refers to the phenomenon where

an economic event in one country or region has a
ripple effect on other countries or regions.
 In July, China's headline consumer price index dropped by 0.3%
year-on-year, marking the country's first deflation in over two
years—an unusual contrast to the economic issues faced by
major Western economies.

0.75

0.5

0.25

-0.25

-0.5
Jan '23 Feb '23 Mar'23 Apr '23 May '23 Jun '23 Jul '23

Source: stats.gov.cn, China Daily, CEIC data


China's deflation has the potential to
create a ripple effect that could impact the
global economy. Here's what all this
could mean for the rest of the world's
markets.
Source: Business Insider India
Collapsing trade
China's economic troubles and reduced
demand are affecting global markets,
impacting sectors reliant on Chinese exports
while creating opportunities for
diversification.
Exporting deflation
The slowdown in China is already impacting
American companies with ties to the country,
potentially leading to pricier consumer products
and corporate profit challenges.
Housing crash
China's property market woes threaten consumer
spending, economic growth, and global market
stability, with potential risks of defaults by
Chinese developers on US bonds.
THANK YOU