China is grappling with a concerning deflationary spiral, as prices continue to fall and consumer confidence weakens. While the government attempts to counter the downturn through stimulus measures, internal economic weaknesses are creating significant challenges. Exports have slowed due to trade tensions, leading to a redirection towards the domestic market, yet demand remains weak. This has resulted in surplus inventory and declining food prices, fueling fears of a prolonged recession. Consumers remain hesitant due to high debt levels, stagnant job markets, and an uncertain financial landscape, contributing to the overall decline. The situation is further exacerbated by China’s reliance on exports for growth, making it difficult to shift gears quickly.