Don’t Call It Stagflation, But China Assets Flash Economic Worry

A rare, simultaneous bout of weakness is hitting Chinese bonds and stocks, exposing growing unease about the dual brunt of slowing output growth and rising prices in the world’s second-largest economy.

Up until recently, stock investors could take a measure of solace from weakening economic growth, confident that policy makers would respond with expanded stimulus measures -- even if they weren’t the same scale as in years past. But now, a jump in inflation is cementing the view that the People’s Bank of China isn’t likely to roll out large-scale stimulus soon.