China’s consumer prices fell again in September as demand remained weak in the world’s second-largest economy, while a slight narrowing of the fall in factory-gate prices gave a hint that Beijing’s efforts to curb involution – cutthroat intra-industry competition that pushes prices lower – could be making ground.
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The national consumer price index (CPI), a key gauge of inflation, fell 0.3 per cent year on year last month, according to data released by the National Bureau of Statistics on Wednesday.
The fall was bigger than the market had expected, with a poll by financial provider Wind having forecast a 0.15 per cent drop. In August, the CPI fell 0.4 per cent year on year.
China is grappling with persistent deflationary pressures, driven by the dual challenges of sluggish domestic demand and oversupply, with trade uncertainty hindering suppliers’ efforts to clear excess inventory.
“The year-on-year decline was primarily due to a tail effect,” said Dong Lijuan, a senior statistician at the bureau, referring to a higher base last year.
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Lower food and energy prices were the main factors contributing to the decline, she added.
