Doing business in China? Factor in deflation

While U.S. companies battle inflation, those in China are up against something very different: deflation

While U.S. companies battle inflation, those in China are up against something very different: deflation.

The high-end Beijing hotel Beiyuan Grand has been setting up stalls in the evenings to serve dishes to passers-by — as Chinese consumers and companies cut back on travel, banquets and events. Chef Wang cooks up his specialty fried pigeon there, not in the hotel’s restaurant but out on the sidewalk.

“When we sold fried pigeons inside the hotel restaurant, we used to sell only 60 to 70 a day,” Wang said. “Now we sell around 200.”

But those sales come at cut prices.

Before, each fried pigeon cost $8. Today, they go for $5.30.