Deflation and default haunt China’s economy

It can sometimes be difficult to wrap one’s head around the world’s second biggest economy. But three headlines in the space of two days—August 8th and 9th—captured the predicament that China now faces. Exports fell by more than 14% in dollar terms. Country Garden, one of the country’s biggest property developers, missed two coupon payments on its dollar bonds. And annual consumer-price inflation turned negative. In sum: China’s export boom is long over. Its property slump is not. And, therefore, deflation beckons.