China’s consumer prices fall for fourth month in May amid weak demand, trade tensions
The country’s consumer price index dropped by 0.1 per cent last month, while prices at the factory gate were down 3.3 per cent

China’s consumer prices declined for a fourth straight month in May, highlighting persistent deflationary pressures driven by sluggish demand and trade tensions with the United States, which are compounding inventory strains for manufacturers.

The national consumer price index (CPI), a key gauge of inflation, fell 0.1 per cent year on year last month, according to data released by the National Bureau of Statistics on Monday.

The figure beat market expectations after a poll by financial provider Wind forecasted a 0.17 per cent drop. In April, the CPI saw a 0.1 per cent year-on-year decline.

“China is boosting consumption with greater intensity and more precise measures. New quality productive forces are growing stronger, and supply-demand relationships in some sectors have improved, leading to positive price changes,” said Dong Lijuan, chief statistician of the bureau.

China’s CPI in May also marked a 0.2 per cent contraction from April. Dong said that a decline in energy prices was the main cause of the drop.

China is grappling with persistent deflationary risks due to sluggish domestic demand and oversupply, while uncertainty over trade continues to cloud suppliers’ ability to clear excess inventory, adding to deflationary pressures. A new round of trade talks between China and the United States is set to take place in London on Monday.

Zhang Zhiwei, president and chief economist of Pinpoint Asset Management, said the May CPI figures underscored China’s ongoing deflationary pressures.

“The price war in the auto sector is another signal of fierce competition driving prices lower,” he said, referring to major carmakers offering steep discounts in late May that drew a warning from Beijing.

In May, food prices declined by 0.4 per cent from a year earlier, while service prices rose by 0.5 per cent, according to the statistics bureau.

Prices for other goods and services and clothing rose by 7.3 per cent and 1.5 per cent, respectively, while housing saw an increase of 0.1 per cent.

Core inflation, which excludes volatile food and energy prices, rose 0.6 per cent year on year last month.

China’s producer price index (PPI), which tracks factory gate prices, fell by 3.3 per cent last month, marking the 31st consecutive month of contraction.

The reading was steeper than the 3.17 per cent decline forecasted by Wind, and marked a 0.4 per cent drop from the previous month.

Dong attributed the decline to “international imported factors”, noting a drop in oil and natural gas, as well as seasonal declines in the prices of some energy and industrial materials at home.
In light of the data release, Goldman Sachs revised its forecast for China’s PPI for 2025, to a decline of 2.4 per cent vs an earlier estimated drop of 2.1 per cent.

“While CPI prints are on track with our current quarterly forecasts, the weaker-than-expected PPI prints suggest more deflationary pressures on China’s PPI inflation for 2025 and 2026 than we previously anticipated,” Goldman Sachs analysts said in a note.

so when consumer price increase only good?

means more expensive stuff? inflation?

so Malaysia Price Hike is good then?

been questioning how the world measure GDP growth. mostly are just BNPL and inflation jer these day. no real improvement.

since 1989 already china gonna collapse

but,
oh well

a lot of china citizens saddled on huge property loans and still paying higher instalment and high interest on it

Now with China 10 years bond yield at 1.7%, the FD interest also reduce, government intend to let those their property loan to be refinance/restructure with a lower interest rate. If they manage to do this then there will be more spending power and stimulate their domestic economy.