Overview

• China's consumer price index fell 0.1% year-on-year in March 2025, following a larger 0.7% drop in February, indicating continued deflationary pressures.
• Producer prices declined by 2.5% in March, the steepest drop since November 2024, marking the 29th straight month of contraction in producer prices.
• The Chinese government has doubled subsidies for a consumer trade-in program to 300 billion yuan ($41.47 billion), expanding support to include mid-range smartphones and home appliances.
• Policymakers have made boosting domestic consumption a top priority, as highlighted in the Government Work Report, which referenced consumption more than any time in the past decade.
• Heightened trade tensions between China and the U.S. add external challenges to China's economic recovery, increasing the urgency of domestic stimulus measures.