A woman puts an electric scooter by the Beiyuan Grand Hotel in Beijing, China, August 11, 2025.
Maxim Shemetov | Reuters
While American companies are fighting against inflation, people in China face something very different: deflation.
The high -end hotel by Beijing Beiyuan Grand has set up stands in the evening to serve dishes for passers -by – while Chinese consumers and businesses reduce travel, banquets and events. Chef Wang cooks his fried chip specialized there, not in the hotel restaurant but on the sidewalk.
“When we sold fried pigeons inside the hotel restaurant, we only sold 60 to 70 per day,” said Wang. “Now we are selling about 200.”
But these sales have a drop in prices.
Before, each fried pigeon costs $ 8. Today, they cost $ 5.30.
Lower prices is a problem through the Chinese economy. This occurs while consumers, uncertain of the future, have driven out value.
On the way back of work, Wan Qiang picked up a gourmet dinner dinner, duck wings and Beiyuan steamed breads for just over $ 4.
“The economy is not doing so well,” he said. “The food is very clean and the quality is good.”
Another factor using Chinese prices is the excess capacity in everything, from electric vehicles and solar panels to food delivery services, leading to what is described in China as an “involution” or competition for background.
Food delivery is one of the most fiercely competitive battlefields. The market leader Meituan faces a silly competition from Alibaba and JD.com. They all offered coupons to fight for business lowering prices.
The Chinese government, worried about rooted deflation, has intervened with revised warnings and regulations to control prices.
The country is expected to display data from the price of price and production prices for August data on Wednesday. Goldman Sachs predicts that wholesale prices will remain “deeply negative”, the production price index lowering 2.9% over a year. The bank considers the consumer price index as “moderately negative”, down 0.2% compared to a year ago.
In the deflationary environment, consumption models change.
Used luxury products are so strongly requested that the vendor of vintage online products Zhuanzhuan opened a physical superstore this summer in downtown Beijing.
For wealthy Chinese consumers like Hao Wenli, it was once socially unacceptable not to buy again.
Which no longer has stigma.
“We are barely in luxury stores,” she said. “It’s a difficult time now to earn money, so why not shop in places like this and save saving?”