China does not realize the dangers of deflation

Past struggles with inflation blind Xi to risk of a shrinking economy

20250310N Xi Jinping

Chinese President Xi Jinping has reportedly asked advisers what's so bad about deflation. (Xinhua via AP)

TETSUSHI TAKAHASHI

TOKYO -- I confess that when starting out as an economic journalist in the 1990s, I did not understand why deflation was bad.

Japan's bubble economy had just burst, and prices, said to be among the highest in the world at the time, were starting to come down. Many Japanese people, including me, thought that cheaper goods and services would spur consumer spending.

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