China’s deflationary spiral is entering a dangerous new stage while the rest of the world is worried about Rising costs China has been grappling with falling prices since late last year data released earlier this week confirmed that across large parts of the economy consumer prices are still barely Rising the danger for China is that deflation could snowball by encouraging households already hit by Falling wages and slumping property valuations to cut back on spending because they expect prices to fall further that in turn hits company profits leading to more salary cuts and layoffs ultimately bankrupting families and firms and worries about the prospects of the second largest economy are weighing on the country’s stock markets where one key index has been underperforming Global equities for the longest stretch since the turn of the century