http://fortune.com/by Laura Lorenzetti
SEPTEMBER 10, 2015, 12:41 PM EDT
The data looks grim.
China’s economy has been on a rollercoaster ride for the past few months, and the latest data out of the world’s second largest nation isn’t getting much better.
Here’s a quick rundown on the situation.
The background
Since mid-June, the main stock index in Shanghai is down about 40%. Its stock-index futures market, the world’s biggest, hit record lows on Wednesday after falling 99% from June highs.
At the same time, the nation has struggled to stabilize its currency. The People’s Bank of China (PBOC) devalued the yuan by about 2% in early August, an unexpected move that brought the currency’s value closer to what the market believes it ought to be. It also may help China’s export sector.
But Chinese officials have been intervening to stop the yuan from going into freefall, which led to a $94 billion decline in its foreign currency reserves last month.
Latest update
The greatest risk currently for China is deflation, which could slow economic growth considerably.
China’s Producer Price Index (PPI), a measure of change in the price companies receive for their output, fell 5.9% in August, a much steeper decline than expected. The drop cut into profits at Chinese firms, which has already led to layoffs.
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