China’s spiral into deflation is proving hard to fix. Prices in the world’s second-biggest economy have fallen for six consecutive quarters, and if they fall for one more quarter, the run would equal a record deflationary streak set in the Asian Financial Crisis in the late 1990s.

Policymakers have pledged to do more to shore up growth and ease price declines, using some of their most direct language in years, as Beijing braces for a trade war with Donald Trump’s return to the White House. The US president-elect has vowed to impose a 60 per cent tariff on Chinese exports that would decimate bilateral trade.

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