Ice Age

As Bloomberg columnist John Authers comments, deflation’s icy grip tightens on China, as hopes for a robust stimulus fizzle. Property prices languish, weighed down by a mountain of local government debt north of 60 trillion yuan. Investor patience is wearing thin—bond yields keep tumbling, a stark signal that the world’s second-largest economy is flirting with a Japan-style stagnation. And even talk of a looming mega-bailout does little to revive the mood. Without a serious jolt from Beijing, China’s post-pandemic malaise could morph into a vicious cycle of vanishing consumer demand and deflationary gloom. The clock is ticking, and the stakes are high: If the government doesn’t turn this ship around soon, the chill of deflation may linger far longer than anyone expects.