It’s a little confusing since you use the words inflation and deflation for two different things. Inflation is the increase in money supply. Deflation is the decrease in money supply. In a debt based system, money is created through debt. And then there a prices for goods and services. Prices go up when you increase the money supply, cp. and prices are also driven by supply and demand. What’s going on in China is a classic collapsing economy. They massively increase money supply, $1.4 trillion last week, while prices are falling. Using the words inflation/deflation for both, money supply and prices, gets confusing.