China's Margin Crisis - Joe Blogs

[TexasTowelie]

The official figures published by China's National Bureau of Statistics show that China’s economy is still growing strongly and any slowdown is considered to be temporary. However a very different picture is starting to emerge.

China’s economy is facing a growing and deeply worrying imbalance.

Producer prices have now been falling for multiple consecutive years, with factory-gate prices down nearly 7% since 2022. At the same time, consumer inflation has barely moved. That widening gap is creating a significant squeeze on Chinese businesses, eroding margins and putting pressure on profitability across industry.

In this video, we break down the latest Producer Price Index (PPI) data, compare it directly with consumer inflation, and calculate the real impact on company revenues. We also examine what’s happening to wage costs and input prices — and why falling output prices combined with weak domestic demand is a major structural problem for China.

This isn’t just about deflation. It’s about overcapacity, price wars, shrinking margins and rising financial stress across the industrial sector.

The numbers tell a very clear story — and it’s not a comfortable one.

Chapters:
0:00 Intro
0:57 PPI
4:48 INFLATION
6:41 LOST MARGIN
8:25 SECTORS
13:44 SUMMARY & CONCLUSION