China's new magic is deflation
Here is China's magic: deflation. Yes, the world is fighting inflation but China has deflation, which means things are really cheaper in China. If that is the case, why do you need to build anything at home when you can buy it cheap from China? A nation in motion indeed.
China has slipped into deflation for the first time in two years, in what could be a warning sign for the U.S. and other major world economies. Since the nation lifted pandemic restrictions late last year, prices have fallen for everything from steel to vegetables: They were down 0.3% in July compared to a year earlier, in sharp contrast to the U.S. and EU, where consumer prices rose an annual 3% and 6.4% in June, respectively. Those lower prices could lead to a flood of cheap exports from China, which in turn could hurt profits and jobs at producers in other countries.
This is the battle in the US: "The Twin Cities is now the only major U.S. metropolitan area to bring inflation below the Fed target of 2% — thanks to an aggressive push to make housing more affordable. In 2019, Minneapolis killed zoning that allowed only single-family homes, and since 2018, it's invested over $300 million in rental assistance and subsidies. Those changes enabled an explosion of new-build condos and apartments, and as of May, shelter prices in the city were up at half the nation's annual pace. Now, Minneapolis residents spend about 40% of their income on housing, while in comparable metros like Boston and Chicago, that number's closer to 60%. "