China slips into deflation. How will this affect Indian economy?

livemint.com:

Covid-19 pandemic induced lockdown. According to reports, the official consumer price index, a measure of inflation, fell by 0.3% last month from a year earlier. On Tuesday, official figures showed that China's exports fell by 14.5% in July compared with a year earlier, while imports dropped 12.4%.

According to a report by CNN, the cost of food, transportation, and household goods all declined in July in China. In particular, pork prices were down 26%, and vegetable prices were down 1.5%, the media outlet reported. “Deflation is when the prices of goods and services decrease across the entire economy, increasing the purchasing power of consumers.

It is the opposite of inflation and can be considered bad for a nation as it can signal a downturn in an economy, leading to a recession or depression," Investopedia describes. President Joe Biden signed an executive order Wednesday to block and regulate high-tech U.S.-based investments going towards China — a move the administration said was targeted but it also reflected an intensifying competition between the world's two biggest powers. Not a repercussion, but an impact - e-commerce giant Alibaba announced an unexpected 14 percent on-year increase in quarterly sales following several difficult years and in spite of a broader economic slowdown, reported AFP.

It is to be noted that Alibaba is a key player in China's expansive digital economy and the operator of a major online shopping platform. Positive effect: If investment in the Chinese economy is lowered owing to the increasing slowing rate of their economy, and now deflation, India could potentially emerge and take over as the manufacturing hub for the developed economies. This is also something the developed countries