China in Danger of Entrenched Deflation

[Frodo]

Not too dissimilar to what happened to Japan in the 1990s:

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[Ban my account ffs!]

Demographically (namely, age structure wise), China is currently right where Japan was 20 years ago (mid 90s). 


Japan in 1995


China in 2014


There has been a brief uptick in births the past few years in China as the echo baby boom born in the 1985-1995 period begins to have children... but this could easily be squashed by a big recession there... the way the expected echo boom in Japan in the late 90s and early 2000s was.

China would need to really shore up family supports for working women (child care, child payments, maternity leave).  They are in much better position to do this than Japan... but it will be vital.  I think the swing from one-child restrictions to encouraging more children will be fast.