China is stuck in the longest deflationary cycle in decades:

China's GDP deflation index decreased by -0.7% in Q4 2025, marking the 11th consecutive quarter of decline, the longest streak in at least 30 years.
China has experienced deflation for three consecutive years, the longest since the country transitioned to a market economy in the late 1970s.
By comparison, the deflationary streak lasted only 2 quarters after the 2008 financial crisis.
Most recently, producer prices fell by -1.4% year-over-year in January, marking the 40th consecutive month of producer deflation.
This occurs as weak consumer demand, due to the real estate market crisis, continues to push prices lower.
Furthermore, Chinese factories are producing much more than consumer demand, forcing companies to slash prices aggressively to survive.
China's deflationary spiral shows no signs of improvement.