Consumer prices in China fell to their lowest level in more than a year, raising concerns over persistent deflationary pressures in the world\u2019s second-largest economy. The Consumer Price Index (CPI) dropped by 0.7% in February compared to the previous year, according to China\u2019s National Bureau of Statistics (NBS). The decline reversed January\u2019s 0.5% increase and was sharper than expected, marking the first contraction since January 2024.<\/p>\n\n\n\n
Deflation reduces incentives for consumers to spend, as they anticipate lower prices in the future, which in turn dampens economic growth. The February decline was partly influenced by an earlier Lunar New Year holiday, which boosted tourism and spending in January instead of February.<\/p>\n\n\n\n
According to the NBS, consumer prices would have risen by 0.1% if the effect of the earlier holiday was excluded. Core CPI, which excludes volatile food and fuel prices, declined by 0.1%\u2014the first decrease since January 2021.<\/p>\n\n\n\n
The Producer Price Index (PPI), which measures wholesale prices, fell 2.2% in February compared to the previous year. Factory-gate prices have now been contracting for 29 consecutive months since October 2022.<\/p>\n\n\n\n
\u201cBoth CPI and PPI inflation have remained too low over the past two years, underscoring supply and demand imbalances in China\u2019s economy,\u201d Goldman Sachs economists noted in a research report.<\/p>\n\n\n\n
China\u2019s economic recovery continues to face challenges, including weak consumer spending, an uncertain employment outlook, and a prolonged downturn in the property sector. Internationally, China is under pressure as trade tensions with the United States escalate.<\/p>\n\n\n\n
\u201cThe uncertainty of the external environment is increasing, while we also face issues such as insufficient domestic demand and operational difficulties for some industries,\u201d said Zheng Shanjie, head of China\u2019s state planner, the National Development and Reform Commission.<\/p>\n\n\n\n
Beijing has set an ambitious 5% economic growth target for 2025, the same as last year. It has also lowered its consumer price increase target to 2%, down from 3% in 2024, acknowledging continued deflationary pressure. However, despite calls for stimulus, no major spending programs were announced at the recent National People\u2019s Congress.<\/p>\n\n\n\n
At a press conference, Wang Xiaoping, China\u2019s Minister of Human Resources and Social Security, admitted that stabilizing and expanding employment remains a major challenge. Meanwhile, Ni Hong, Minister of Housing and Urban-Rural Development, emphasized the government\u2019s commitment to stabilizing the real estate sector. The government has allocated 4.4 trillion yuan ($608 billion) in special bonds for local governments, with part of the funds designated for converting commercial housing into affordable housing and worker dormitories.<\/p>\n\n\n\n
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Consumer prices in China fell to their lowest level in more than a year, raising concerns over persistent deflationary pressures in the world\u2019s second-largest economy. The Consumer Price Index (CPI) dropped by 0.7% in February compared to the previous year, according to China\u2019s National Bureau of Statistics (NBS). The decline reversed January\u2019s 0.5% increase and […]<\/p>\n","protected":false},"author":10772,"featured_media":9617,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[1182,1179,288,333,1028,1184,1183,1180,1181,1169],"class_list":{"0":"post-9616","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-world","8":"tag-beijing-stimulus","9":"tag-china-deflation","11":"tag-economic-growth","12":"tag-economic-slowdown","13":"tag-employment-outlook","14":"tag-factory-gate-prices","15":"tag-inflation-target","16":"tag-property-market","17":"tag-trade-tensions"},"_links":{"self":[{"href":"https:\/\/globalgazette.us\/index.php?rest_route=\/wp\/v2\/posts\/9616","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/globalgazette.us\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/globalgazette.us\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/globalgazette.us\/index.php?rest_route=\/wp\/v2\/users\/10772"}],"replies":[{"embeddable":true,"href":"https:\/\/globalgazette.us\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=9616"}],"version-history":[{"count":1,"href":"https:\/\/globalgazette.us\/index.php?rest_route=\/wp\/v2\/posts\/9616\/revisions"}],"predecessor-version":[{"id":9618,"href":"https:\/\/globalgazette.us\/index.php?rest_route=\/wp\/v2\/posts\/9616\/revisions\/9618"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/globalgazette.us\/index.php?rest_route=\/wp\/v2\/media\/9617"}],"wp:attachment":[{"href":"https:\/\/globalgazette.us\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=9616"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/globalgazette.us\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=9616"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/globalgazette.us\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=9616"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}