China's Inflation Slows, Raising Concerns Over Deflation Risks

Producer prices fell for the 27th consecutive month in December, while consumer inflation growth hit its weakest pace since April, signaling persistent economic challenges.

• China's consumer price index (CPI) rose by just 0.1% year-on-year in December, down from November's 0.2% increase, according to the National Bureau of Statistics.
• Producer prices declined 2.3% year-on-year in December, marking the 27th straight month of deflation but showing a slight improvement from November's 2.5% drop.
• Weak domestic demand and declining food prices, including a 2.1% drop in pork prices, contributed to the near-zero inflation, raising fears of deflationary pressures.
• Efforts by Beijing to stimulate consumption, such as subsidies and trade-in schemes, have had limited success in boosting demand and broader economic recovery.
• China's economy continues to face significant headwinds, including high debt levels, a struggling real estate sector, and weak consumer spending, despite signs of stabilization in factory activity.

5 Articles

Semafor SHINE CNBC South China Morning Post