China's Inflation Nears Zero, Will Trump's Entry Add to the Pressure?

China Inflation: Emerging markets are having a rough start to 2025, but the dragon economy appears to be facing an even tougher road. China’s consumer inflation inched closer to zero, marking its fourth consecutive month of decline. This is now casting doubts around government's efforts to boost the demand outlook of the nation via economic stimulus.

The dragon nation's Bureau of Statistics reported on Thursday that the consumer price index increased by 0.1 per cent year-on-year. This marks a decline from the 0.2 per cent rise recorded last month.

This news comes at a time when most of the global economies are facing a complete opposite trend: rising inflation.

In the US, Federal Reserve officials have warned about high inflation risks. Even in the eurozone, price growth picked up last month as per a report by Bloomberg.

If the dragon economy continues to witness deflationary pressures, it could discourage household spending, eventually causing a further drop in the overall figure. For businesses, shrinking revenues from lower prices might reduce their ability to invest, ultimately leading to salary cuts and job losses.

Just last month, President Xi Jinping and other officials said that boosting consumption and domestic demand are the top economic priorities of the nation, to drive growth in 2025. However, the outlook picture doesn't seem to get any better, atleast as of now.

And Trump's re-entry into the White House threatens to further dim the economic picture of the dragon economy.

Trump's Comeback a Major Threat for the Dragon

Trump has been quite vocal about his stance against the dragon economy. From imposition of heavy tariffs to broader trade barriers, the US president-elect has been loud and clear about his policy view.

In November, Trump made it clear that on the first day of his presidency, he would impose new tariffs on China, Mexico and Canada. This was largely aimed at tackling illegal immigration alongside drug smuggling into the US.

As per reports, the new president-elect also announced plans to sign an executive order imposing a 25 per cent tariff on all goods from Mexico and Canada.

While China won’t be the only nation affected, the dragon economy will definitely be one of the hardest-hit owing to the blurry domestic and global policy picture.