In the year of the dragon, will China breathe fire into its deflating economy?

China's economy has gone from bad to worse - and it is only February. Figures released on Thursday showed consumer prices fell by 0.8% in January compared with a year earlier, outstripping economists' expectations and marking the biggest contraction in 15 years. Prices in China have been flat or falling nearly continuously since July. Although the country's zero-Covid policy was abandoned more than a year ago, consumers are still cautious about spending, both on everyday goods and on property, which has traditionally been the driver of growth in China's gross domestic product. Income growth has slowed, and high unemployment rates…