China appears to be engineering a floor under producer prices through administrative pressure, as a narrower September decline hints at early effects, but without stronger demand, any gains may remain fragile.
The producer price index fell 2.3% year-on-year last month, its mildest drop in seven months. The improvement chiefly came from heavy industry.
In July, Beijing called for curbing “low-price, disorderly” competition and promoting the exit of outdated capacity. Markets have interpreted this as a signal of tighter discipline in sectors prone to price undercutting.
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