While the rest of the world experiences the sting of stagflation, the Chinese economy seems to witness a whole different beast: deflation. The slowdown in the Chinese economy has been expected for some time now. The question is whether this is temporary or rather, a longstanding structural problem. China has been a rare success story among ‘communist’ economies. The country began to grow on Stalinist lines – 100% public ownership of industry, village communes rather than family farms and the disastrous course of the Great Leap Forward – the nationwide campaign which claimed over 40 million lives in the 1960s. ... (full story)