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<\/p>\nChina’s consumer prices continued to fall last month, with official data highlighting the battle leaders face in trying to kickstart domestic spending in the world’s number two economy while fighting a trade war with the US.<\/p>\n
Beijing has spent recent years grappling with a range of issues that have weighed on growth and consumer activity, including a persistent slump in the country’s vast property market and high youth unemployment.<\/p>\n
That has been compounded by a renewed standoff with Washington since Donald Trump became US president and unleashed a tariff war on the world, with a particular eye on Beijing.<\/p>\n
The uncertainty this has fanned has made the country’s army of shoppers tighten their wallets.<\/p>\n
Figures today showed the country’s consumer price index – a key measure of inflation – dropped 0.3% year-on-year in September.<\/p>\n
The reading from the National Bureau of Statistics (NBS) was a slight improvement on August but worse than the 0.2% fall forecast in a Bloomberg survey.<\/p>\n
It also comes a day after the International Monetary Fund’s latest World Economic Outlook report noted a “weakness in domestic demand” in China – echoing a broader Asian outlook dimmed by the US trade war.<\/p>\n
The IMF added that a “rebalancing” of China’s economy through fiscal measures targeting social spending and property would help battle deflationary pressure.<\/p>\n
While deflation may be appreciated by consumers, it poses a threat to the broader economy as households tend to postpone purchases in the hope of even lower prices.<\/p>\n
Trade tensions<\/p>\n
China’s inflation stabilisation is “fragile and volatile”, said Tianzeng Xu from the Economist Intelligence Unit in response to today’s data.<\/p>\n
“The housing market has not yet recovered and the labour market remains weak,” Xu added.<\/p>\n
And Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, wrote in a note: “The trade tension returned and growth outlook uncertainty heightened, which is negative for demand recovery.”<\/p>\n
<\/p>\n
The NBS figures also showed the producer price index, which measures the cost of goods before they enter wholesale or distribution, fell 2.3% last month, in line with the Bloomberg forecast and an improvement from August.<\/p>\n
While tensions between Washington and Beijing have eased from their peak, a truce struck by the leaders earlier this year remains shaky.<\/p>\n
After months of relative calm Trump warned Friday that he would roll out an additional 100% tariff on the country’s goods from November 1. That came after Beijing imposed fresh controls on the export of rare earth technologies and other items.<\/p>\n
China’s commerce ministry vowed this week to “fight to the end” in its trade war with Washington, if necessary.<\/p>\n
The latest salvoes came as trade figures from Beijing on Monday provided some hope for the economy, with shipments to the United States – the world’s largest consumer market – rising 8.6% on-month in September.<\/p>\n
Top leaders from the ruling Communist Party will convene in Beijing next week for a closely watched gathering to discuss China’s plan for the next five years, including economic and social development goals.<\/p>\n
Analysts agree that more demand-side support from policymakers would be needed to prop up the economy.<\/p>\n
Until then, there will be “little prospect of a meaningful improvement in China’s deflationary environment in the near term”, wrote Zichun Huang, China Economist at Capital Economics, in a note.<\/p>\n","protected":false},"excerpt":{"rendered":"China’s consumer prices continued to fall last month, with official data highlighting the battle leaders face in trying…\n","protected":false},"author":2,"featured_media":82361,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[72,113,61,60],"class_list":["post-82360","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-ie","tag-ireland"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/82360","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=82360"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/82360\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/82361"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=82360"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=82360"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=82360"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}