Chinese farmers caught up in deflation crisis

20 May 1998

Chinese farmers caught up in deflation crisis

CHRONIC over-production has forced Chinese farmers to rein in their future output after seven consecutive months of falling prices.

Price wars have broken out between suppliers of animal fodder, as well as in other industrial sectors.

The report is illustrated with the story of a herdsman who tells how the price of his six cows had fallen by two-thirds in the past two years. He says he will now have to sell them and get out of cattle.

The article claims his situation is commonplace across China, not only among the 900m people who live off the land but also in other sectors.

• Financial Times 20/05/98 page 4