The National Bureau of Statistics said on Sunday that the consumer price index fell 0.7% in February compared to a year ago. On a monthly basis, prices were 0.2% below January.
While many other countries wrestle with inflation, China’s policy makers are flat for falling prices, and there is a possibility that they may develop an deflation in the spiral that will pull down the economy.
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The government last week emphasized the need to increase domestic demand and consumer expenditure, which was for its formal Legislature, Congress, but held back on unveiling any dramatic new steps to promote the economy.
The lunar new year, a time when traveling for travel, food and entertainment, came in late January this year instead of February, as it is based on the Chakras of the Moon. The holiday spending helped run the consumer price index to 0.5% in January, but it fell last month compared to a high level of 2024 last month.
Factoring the effect of the holiday, the index rose 0.1% last month, in a written analysis by Dong Lijuan, a statisticalist of the government’s Bureau of Statistics.
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It is still much less than the ideal. The government annual report of the previous week included 2% inflation target for this year, but is likely to fall much less than that target. The Consumer Price Index was flat in 2024, growing 0.2%.
A business war with the United States can combine China’s economic headwind.
In addition to the early lunar New Year, two other factors contributed to the fall in prices in February, Dong said: Better weather promoted farm production, reducing the price of fresh vegetables and vehicle manufacturers also increased promotion to try to promote sales, which reduced the prices of new cars.
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The Bureau of Statistics stated that the manufacturer price index, which measures the wholesale value of the goods, fell 2.2% in February. Producer prices are falling faster than consumer prices, which puts pressure on companies to cut labor and other costs.
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