There can be no "deflationary spiral" till the world's central banks stop increasing the money supply. China has not -- what are you talking about?
The world's central bankers are not increasing the money supply - quite the opposite. That's why Western Europe keeps talking about having Eurobonds that act similarly to our Federal treasury notes.
The US is able to create vast amounts of new debt because of our Federal system of government. Western Europe has no such bailout luxury.
China is seeing their outstanding loans begin to decrease. This means that their money supply is decreasing - deflationary.