The slow rise in consumer prices indicates persistent economic challenges for China, as the government grapples with local debt and external pressures from global trade dynamics.
The disparity between consumer and producer price trends highlights a potential downturn in demand, which could further complicate recovery efforts in the Chinese economy.
If consumer prices continue to stagnate, it may prompt the Chinese government to implement more aggressive fiscal policies to stimulate growth.
The impact of Donald Trump's re-election on trade relations could exacerbate existing economic pressures, potentially leading to further declines in export-driven sectors.
China's consumer prices rose at the slowest pace in four months, with a 0.3% annual increase in October, down from 0.4% in September. This marks the lowest inflation rate since June. Meanwhile, producer prices experienced a significant decline, falling 2.9% year-on-year, which is the largest drop in 11 months. Despite these economic challenges, China's top legislature approved a substantial 10 trillion yuan ($1.4 trillion) stimulus package aimed at alleviating local government debt, although analysts suggest it may not significantly boost economic activity or demand in the short term.
Core inflation, which excludes food and fuel prices, saw a slight increase of 0.2% in October compared to 0.1% in September. Monthly data revealed a 0.3% drop in the consumer price index, contrary to expectations of a minor decline. The fiscal policy is expected to strengthen next year, with indications of a potential increase in the official deficit, which could lead to more aggressive economic support measures.
