Iran Conflict Could Flip China’s Deflation Into ‘Bad Inflation’

People stand next to the entrance of a closed shopping mall in Dandong, a city on the border with North Korea, in Liaoning province, China, January 14, 2026. REUTERS/Maxim Shemetov
People stand next to the entrance of a closed shopping mall in Dandong, a city on the border with North Korea, in Liaoning province, China, January 14, 2026. REUTERS/Maxim Shemetov

By Kevin Yao and Liangping Gao

China’s long fight with deflation risks morphing into something harsher, with economists warning the war in Iran could spark “bad inflation” at a time when chronically weak consumption and fading external demand leave the economy with little cushion.

  • Get a daily email packed with the latest news and analysis from Africa, Asia, and across the Global South.
  • Read exclusive insights on the key trends shaping China’s relations across the Global South.
  • Full access to the News Feed that provides daily updates on Chinese engagement in the Global South.

China, Africa and the Global South... find out what’s happening.

Subscribe today for unlimited access.

OR

Already a subscriber? Log in Click Here to Learn More
by Reuters

Most Read

1
Developing Countries’ Debt Servicing Costs to China Are Significant, but Nowhere Near as Much as Other Creditors
2
Uncertainty Roils Minerals Markets
3 Chinese Scholars See Russia’s Venezuela Strategy as a Model of Hybrid Power Projection in the U.S.’ Backyard
4 India Forced to Pay Russia in Yuan, Handing China an Unexpected Win
5 From J-10C to Kaan? Indonesia’s Fighter Jet Deal With Turkey Shocks Chinese Military Fans
6 Chinese Military Fans Discuss Why Indonesia Bought Rafale Instead of J-10C

Related posts:

  1. An Unreliable Friend: Arab Perspectives on China After the Twelve-Day War
  2. Israeli Experts Converge: China Can’t Afford to Back Iran
  3. How Chinese Experts are Reacting to the American-Israeli Strikes on Iran
  4. China’s Leaders Project Stability Despite Middle East War

What is The China-Global South Project?

Independent

The China-Global South Project is passionately independent, non-partisan and does not advocate for any country, company or culture.

News

A carefully curated selection of the day’s most important China-Global South stories. Updated 24 hours a day by human editors. No bots, no algorithms.

Analysis

Diverse, often unconventional insights from scholars, analysts, journalists and a variety of stakeholders in the China-Global South discourse.

Networking

A unique professional network of China-Africa scholars, analysts, journalists and other practioners from around the world.

More about CGSP
Detected IP: ...