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forget inflation, it appears deflation is now threatening china's economy. a post—covid recovery in the world's number two economy is fizzling out. people are seeing their wages cut and the cost of goods as they leave the factory, the �*producer price index', has been dropping for months because of lack of demand, and that slide is accelerating. may saw the steepest fall in producer prices in seven years at 4.6%. live now to janet mui, head of market analysis at rbc brewin dolphin. janet, lovely to see you. explain this for us. people might be think we have been facing prices going up for so long, prices coming down is not a bad thing, but it can be. 50.