China’s deflation reflects weak economic growth, and SA’s tourism sector is a bright spot

Both producer and consumer inflation in China in January were again negative: producer inflation was -2.5% (the 16th month it has been negative) and consumer inflation was -0.8% (the 4th negative month). This is largely due to falling food prices, and is seasonal, but clearly the Chinese economy is weak, and there is negative sentiment about its property sector. In SA, data on both international flights and foreign visitor stays are very encouraging, especially for Cape Town. Clearly this is also partly seasonal and event-driven, but clearly tourism is recovering from Covid-19 and reflects a positive area of the economy.