"China's Looming Deflation and Declining Consumer Confidence: A Risky Situation"

A China strategist warns of potential deflation and rock-bottom consumer confidence, indicating a "very painful economy" for the next three to six months. The Chinese government's decision to keep prime rates unchanged has raised concerns, as deflation and a sluggish growth outlook loom. The real estate market, accounting for a third of China's economic activity, has been hit hard, with buyers hesitant due to fears of further price drops. Despite this, the government aims for a slower-growth, fairer society, potentially enduring a 4-5% growth over the next 3-5 years.