China’s inverse bubble

A population constriction, when the population is forcibly reduced by war, disease or policy requires a different set of release valves than a growing economy. Instead of inflation vs interest rates, it is deflation sets in because decreasing numbers of people create demand, in other words nobody is there to buy things. It is hard enough to sell your products into a niche in competition, but when your customer base erodes, there is a sense of that being economically troubling.

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