China's consumer prices fall by 0.4% in August, producer prices decline for 35th straight month

[Word inflation on Chinese flag]

China’s consumer prices dropped by 0.4% in August, after being flat in the previous month and missing market expectations of a 0.2% fall, marking the steepest decline in six months.

Meanwhile, producer prices fell for the 35th consecutive month, decreasing by 2.9% y/y in August 2025, slowing from a 3.6% drop in the previous month, due to lingering weakness in domestic demand and ongoing trade headwinds.

In the first seven months of the year, producer prices shrank 2.9%. Monthly, the PPI was flat, after a 0.2% fall in the preceding month.

This data provides little clarity on China's economic outlook or the potential for new government stimulus.

Core inflation, which excludes food and energy, rose 0.9% yoy, the highest in 18 months, after a 0.8% gain in July.

On a monthly basis, CPI was flat, below forecasts of 0.1%, following a 0.4% increase in July.

China’s food prices fell 4.3% year-on-year in August 2025, deepening from a 1.6% drop in the previous month and marking the seventh straight monthly decline. It was also the sharpest fall since September 2021.

On Wednesday, the Shanghai Composite [https://seekingalpha.com/symbol/SHCOMP?source=section%3Asearch_bar%7Ccontent_type%3Aall%7Csection_asset%3Asearch-basic%7Csearch_item%3Ashcomp%7Crow_num%3A1%7CURL_first_level%3Anews%7Ctopic%3Asymbol] edged up 0.2% to above 3,810 while the Shenzhen Component slipped 0.3% to 12,470 on Wednesday, with mainland markets lacking clear direction as investors weighed fresh inflation figures, and the offshore yuan [https://seekingalpha.com/symbol/USD:CNY#source=url_first_level%3Amarket-news%7Csection%3Aglobal%7Csection_asset%3Afull_story%7Cbutton%3Abody_link] held steady for the second consecutive session at around 7.12 per dollar on Wednesday.

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Currency: (CNY:USD [https://seekingalpha.com/symbol/CNY:USD])

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