رغم ضغوط الانكماش.. التضخم في الصين يستقر

Consumer prices in China remained stable in July, according to official data; this provided a respite for the world's second-largest economy in the face of strong deflationary pressures coupled with weak domestic demand.

The figures released by the National Bureau of Statistics of China showed that the Consumer Price Index, a key measure of inflation, remained at its level in July on a year-on-year basis, which is better than experts' expectations of a decline of 0.1%.

However, prices recorded an annual decline in rural areas of 0.3%, and for consumer goods of 0.4%. Although financial deflation may provide relief to consumers, it poses a risk to the economy, as it encourages households to postpone their purchases and reduce consumption in hopes of lower prices.

Consumer sentiment in China has been affected for several years by the prolonged real estate crisis and the high youth unemployment rate, and the situation worsened with the onset of the trade war initiated by the United States at the beginning of the year amid tightened tariffs. After four consecutive months of decline, prices began to rise again in June.

In another concerning indicator, the Producer Price Index fell by 3.6% in July on a year-on-year basis, following a similar decline in June. This continuous decline for nearly three years means lower profit margins for companies that are engaged in a fierce price war that the authorities are trying to contain.

China recorded a recovery in its foreign trade in July compared to the same month last year. However, the truce in the trade war between Beijing and Washington ends on Tuesday, the date set by U.S. President Donald Trump for the additional tariffs on China to take effect, unless an agreement is reached.