Unity needed to combat deflation

Investors are wringing their hands over increasingly gloomy outlooks on the world economy. Dramatic drops in European stocks, slumping commodities prices and signs of weakening demand are all doing their part to instill a sense of unease.

Joint action from the world's leading economies is needed to stave off a deflationary spiral. Unfortunately, in the six years since the onset of the global financial crisis, countries remain preoccupied with their own interests. Few, it seems, have either the interest or the ability to explore a unified strategy to spur global growth. Localized monetary easing measures have left world markets awash with liquidity. Yet, prices have yet to recover, suggesting a deep-seated loss of demand. At present, only a handful of countries - including the US and Germany - are positioned to withstand the shocks of a deflationary downturn.

With its massive population and an economy that is deeply reliant on external demand, few countries have more at stake during this period of global weakness than China. The country's leaders should team up with their counterparts in other countries before conditions deteriorate further.