Beijing officials call China’s current deflationary malaise “involution” — a destructive cycle of intense, self-destroying business competition sparked by excess capacity. According to a Bloomberg News analysis, it feels even more pronounced on the ground.

Using data on almost 70 everyday products and services from multiple sources, our analysis showed prices dropped more sharply than the headline Consumer Price Index indicates, especially for ordinary consumer goods. Prices are unmistakably dropping (the cost of pears has dropped 31%; BYD cars have fallen 27%) and it’s already weighing on companies’ results.

The drop in prices is already weighing on company results. Recent filings show losses widening and margins thinning, with many firms citing weak demand and price wars. A Bloomberg News analysis of around 6,000 publicly traded Chinese companies points to a broad-based strain.

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