Chinese women dressed in traditional style clothing, or Hanfu, and other shoppers walk in a popular shopping area on November 8, 2024 in Beijing, China.<\/p>\n
Kevin Frayer | Getty Images News | Getty Images<\/p>\n
China’s producer prices fell more than expected in July, while consumer prices were unchanged, underscoring the impact of sluggish domestic demand and persistent trade uncertainty on consumer and business sentiment.<\/p>\n
Factory-gate prices have been declining for more than two years, and Saturday’s data suggest early-stage efforts to tackle price competition have yet to yield significant results.<\/p>\n
Deflationary pressures have prompted Chinese authorities to address overcapacity in key industries. However, the latest round of\u00a0industrial restructuring\u00a0appears to be a pared-down version of the sweeping supply-side reforms launched a decade ago that were pivotal in ending a deflationary spiral.<\/p>\n
The producer price index fell 3.6% year on year in July, National Bureau of Statistics data showed on Saturday, missing economists’ forecast of a 3.3% slide and matching the near 2-year low recorded in June.<\/p>\n
Extreme weather and global trade uncertainties contributed to price declines in some industries, Dong Lijuan, NBS chief statistician, said in a statement.<\/p>\n
However, on a month-on-month basis, PPI shrank 0.2%, improving from June’s 0.4% drop.<\/p>\n
Despite the headline figures, some analysts see signs of easing deflationary pressure. Xing Zhaopeng, senior China strategist at ANZ, pointed to improvements in month-on-month PPI and year-on-year core CPI.<\/p>\n
He expects the current “anti-involution” policy measures – aimed at curbing disorderly competition in sectors like autos -to begin lifting year-on-year PPI from August.<\/p>\n
Still, other analysts remain cautious, noting that without demand-side stimulus or reforms to improve people’s welfare, the measures may have limited impact on final demand. A prolonged housing downturn and fragile trade relations with the U.S. also continue to weigh on consumer spending and factory activity.<\/p>\n
China’s consumer price index was flat year-on-year in July, compared with a 0.1% rise in June, NBS data showed, beating a Reuters poll forecast of a 0.1% slide.<\/p>\n
Core inflation, which excludes volatile food and fuel prices, was 0.8% in July from a year earlier, the highest in 17 months. Food prices fell 1.6%, following a 0.3% decline in June.<\/p>\n
Extreme weather added to the economic strain, with sweltering\u00a0heat<\/a>\u00a0gripping much of China’s eastern seaboard last month and heavier-than-usual\u00a0downpours<\/a>\u00a0lashing the country with the East Asian monsoon stalling over its north and south.<\/p>\n On a monthly basis, the CPI edged up 0.4%, against a 0.1% drop in June and exceeding forecasts for a 0.3% rise.<\/p>\n “Nonetheless it is still unclear if this is the end of deflation in China,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management.<\/p>\n “The property sector has not stabilized. The economy is still supported more by external demand than domestic consumption. The labour market remains weak,” he said.<\/p>\n","protected":false},"excerpt":{"rendered":"Chinese women dressed in traditional style clothing, or Hanfu, and other shoppers walk in a popular shopping area…\n","protected":false},"author":2,"featured_media":54446,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[5754,84,273,891,1294,56,54,55],"class_list":["post-54445","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-asia-economy","tag-business","tag-business-news","tag-china","tag-economy","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/54445","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=54445"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/54445\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/54446"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=54445"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=54445"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=54445"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}