China's Falling Factory Prices Feed Global Deflationary Pressures

A big contributor is the continued decline in the price of commodities.

Now, many observers are talking about the prospects of deflation in the world's second largest economy.

More than that, China's economic challenges may have an effect beyond its own borders.

Read this excerpt from an April 8 Bloomberg article titled, "China's Deflation Threat: What to Look for Beyond the Headlines":

Falling prices at the factory gate are allowing China's exporters to cut asking prices, feeding global deflation pressures. An export price index from China's customs office dropped 3.7 points in February from the prior month, the most since January 2012.
Price levels have caught analysts off guard, with the Citi Inflation Surprise Index for China becoming more negative since October 2013, meaning analyst forecasts have been getting progressively more wrong.
The combination of volatile global and domestic factors have made it more difficult for economists to accurately project price changes, said Chen Xingdong, chief China economist at BNP Paribas SA in Beijing.

You can access the entire article by following the link below: