![deflation[1].JPG](http://www.soxfirst.com/wp-content/uploads/deflation[1].JPG)
Worrying figures with China's annual inflation rate falling to 2.4% in November. It's the lowest rate of increase in almost two years. In the year to February 2008, it was 8.7% which means basically that China has shifted from inflation to deflation in less than a year.
With commodity prices in free fall, we can expect to see China's CPI falling below zero, and that's a real worry. China's international trade levels are down, industrial production and other domestic activity indicators are looking bad. Now inflation is stalling. This can only mean that China is in for a hard landing and that should concern the rest of the world.
Some analysts, reported here, are talking about "good deflation" reducing commodity and raw-material costs for manufacturers. But the real danger is that this will reduce margins and lead to job losses, and that would be a complete disaster
no comment untill now