China Producer Prices Fall for First Time in Three Years, Deflation Worries Resurface

China’s factory gate prices shrank for the first time in three years in July, stoking deflation worries and adding pressure on Beijing to deliver more stimulus as the economy sputters amid an intensifying trade war with the United States. With demand slowing at home and abroad, Chinese manufacturers are having to cut prices to keep market share, depressing profit margins and discouraging the fresh investment needed to get the economy back on its feet, Reuters reported. Falling prices for crude oil, iron ore and other raw materials are also playing a part. That compared with zero growth seen in June and a 0.1% drop expected by analysts in a Reuters poll. It was the first contraction on an annual basis since August 2016, though the index have now dropped sequentially for the last two months. PPI is one gauge of corporate profitability. Read more

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