China Exports Deflation But US Isn’t Benefiting as Ties Weaken
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China's producer prices fell for a 20th month in May, the longest streak since 2012 to 2016. Lower prices are flowing abroad, with export prices falling about 14% since the start of 2023. While the discounts are crimping profit margins of Chinese manufacturers and fueling trade tensions with the US and others, they're helping central banks in many emerging markets rein in price pressures. Economies benefiting most are those that rely most heavily on shipments from China, especially for goods tied to the housing market that have seen the steepest price drops. China is stuck in a period of deflation amid weak local demand and a property downturn, leaving policymakers reliant on strong overseas sales to meet their growth targets. The composition of its customers is shifting, with shipments to advanced economies declining and emerging markets like Hungary, Russia, and Indonesia benefiting. Inflation remains sticky in the US and Europe, where protectionist measures against China are rising.

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https://www.bloomberg.com/news/articles/2024-06-12/china-exports-deflation-but-us-isn-t-benefiting-as-ties-weaken