China is struggling with deflation

While most countries are currently dealing with inflation, prices for services and goods are falling in China - deflation is in full swing. 

One reason for the situation is the lower demand for services and goods from other countries and from China itself. 

Consumers are saving, and the low demand is causing prices to fall. As consumers wait for even lower prices in the future, the deflationary spiral continues. 

The Wall Street Journal describes the current situation as follows:

Prices charged by Chinese factories fell the most in seven years in May.

Chinese manufacturer prices fell 4.6% year-over-year in May, to the weakest level since early 2016. 

To counter falling prices and get the economy recovering, Chinese policymakers would need to respond by, for example, cutting interest rates, weakening the currency, or providing other spending incentives to households and businesses. 

Measures such as these would result in lower prices for companies producing in China across a wide range of industries, including the toy sector. 

Source: www.globaltoynews.com