China's Economic Divergence: Rising Consumer Prices Amid Factory Deflation

As consumer prices in China rise for the third consecutive month, factory gate prices continue to fall, highlighting mixed signals in economic recovery.

Consumer Price Index (CPI) in China increased by 0.3% year-on-year in April, marking a slight acceleration from previous months.
Producer Price Index (PPI) recorded a 2.5% decline in April year-on-year, continuing its downward trend despite marginal improvements.
Core inflation, excluding volatile items like food and fuel, rose to 0.7% in April from 0.6% in March, indicating subdued but steady price pressures.
Weak domestic housing demand and high unemployment among youth are pressing concerns, with significant drops in home sales during the Labour Day holiday.
Chinese authorities plan to flexibly use monetary tools such as reserve requirements and interest rates to support economic stability.