Can China Fall into the Deflation Trap? The Chinese economy has entered a period of deflation, with prices of goods and services decreasing, going against the trend in major global economies. While the rest of the world is grappling with inflation, China is facing serious economic challenges since its exit from the "zero Covid" policy. The lifting of Covid-19 restrictions gave a boost to the Chinese economy, and there was hope that this momentum would continue. Many businesses restocked in anticipation of an expected increase in demand. However, this momentum is now fading, and companies are forced to sell off their stocks at lower prices. One sector particularly affected is the automobile industry, with a price war in electric vehicles.

Can China Fall into the Deflation Trap? The Chinese economy has entered a period of deflation, with prices of goods and services decreasing, going against the trend in major global economies. While the rest of the world is grappling with inflation, China is facing serious economic challenges since its exit from the "zero Covid" policy. The lifting of Covid-19 restrictions gave a boost to the Chinese economy, and there was hope that this momentum would continue. Many businesses restocked in anticipation of an expected increase in demand. However, this momentum is now fading, and companies are forced to sell off their stocks at lower prices. One sector particularly affected is the automobile industry, with a price war in electric vehicles.

On the surface, this decrease in prices may seem beneficial for the purchasing power of the Chinese people, but deflation poses a threat to the recovery. Instead of spending, consumers are delaying their purchases in hopes of further discounts. After the global financial crisis in 2008, China invested 4 trillion yuan (approximately 586 billion euros at the exchange rate of that time) to stimulate economic activity. This massive recovery plan led to significant infrastructure development but also risked creating unnecessary projects and increasing debt. The state is reluctant to implement another stimulus plan due to the bursting of the real estate bubble the last time one was launched. This real estate crisis turned into a crisis of confidence, and the authorities are keen to avoid a repeat of this situation.

In order to align with lower prices, countries that import a significant amount of goods from China may also seek to lower their prices. To achieve this, companies may resort to layoffs, wage freezes or reductions, and production cuts. This can have a cascading effect on the global economy.

Switching gears, let's delve into the topic of working on math problems. When preparing for exams like the EDHEC and emlyon, it is crucial to redo exercises that you don't fully understand and review the key topics. It is better to master an entire subject thoroughly than to skim through two or three subjects. For the Parisian exams, it can be time-consuming to revisit a subject knowing that the specific concept will likely not be tested again. However, it is still beneficial to note down the most important or classic questions to redo later, perhaps using a study guide or tips booklet. It is recommended to tackle around ten exams from EDHEC and emlyon, depending on your level and the school you are aiming for. As for the Parisian exams, as the topics covered are rarely repeated, especially in the math I exam, it is important to choose the exams you work on carefully and only attempt those for which you have access to a solution guide.

To summarize, China's struggle with deflation poses challenges to its economic recovery, while the global impact of lower prices can lead to job losses, wage reductions, and production cuts in importing countries. On the academic front, effective preparation for math exams requires thorough understanding of key subjects and targeted practice on past exams.

Three actionable pieces of advice to consider in light of these topics are:

• 1. Diversify the economy: China should focus on diversifying its economy to reduce reliance on specific sectors, such as real estate, which can lead to volatile economic cycles.

• 2. Implement targeted stimulus measures: Instead of broad-based stimulus plans, the Chinese government could consider implementing targeted measures to support specific sectors or industries that are facing challenges due to deflation.

• 3. Develop a comprehensive study plan: When preparing for math exams, create a study plan that includes revisiting difficult exercises, focusing on key topics, and practicing with past exams to ensure a thorough understanding and mastery of the subject matter.