Shard Capital warns China risks deflationary trap as debt load mounts

• Shard Capital’s September 2026 review warned China is sliding into a deflationary trap, with demand weakening despite a surge in exports.
• Retail sales rose 1.1% in the first eight months, exports climbed nearly 15%, fixed-asset investment fell 7.7%.
• It flagged a two-speed economy, with middle-class trading down fueling price wars that squeeze corporate profits.
• It outlined potential policy pivots toward demand stimulus, stronger social safety nets, or explicit monetary reflation to lift money velocity.
• Markets: Europe fell almost 5% (USD), S&P 500 slipped 0.35%, silver plunged 13%, Vanguard Long-Term Treasury ETF dropped as much as 5%.

Disclaimer: This news brief was created by Public Technologies (PUBT) using generative artificial intelligence. While PUBT strives to provide accurate and timely information, this AI-generated content is for informational purposes only and should not be interpreted as financial, investment, or legal advice. Shard Capital Partners LLP published the original content used to generate this news brief on October 02, 2026, and is solely responsible for the information contained therein.