A woman takes pictures with a Labubu doll at a Pop Mart store in Shanghai, China, on June 5, 2025.
Ying Tang | Nurphoto | Getty Images
China’s consumer prices fell for a fourth consecutive month in May, as Beijing’s stimulus measures appear insufficient to boost domestic consumption while trade tensions simmer.
The consumer price index fell 0.1% from a year earlier, according to data from the National Bureau of Statistics released Monday, compared with the median estimate for a 0.2% decline among analysts polled by Reuters.
The CPI slipped into negative territory in February, falling 0.7% from a year ago, and continued to post year-on-year declines of 0.1% in March and April.
Separately, deflation in the country’s factory-gate or producer prices deepened, falling 3.3% from a year earlier in May, a sharper decline than analysts’ expectations for a 3.2% drop. The wholesale prices have remained in deflationary territory since October 2022, according to LSEG data.
On May 7, Chinese top financial regulators unleashed a flurry of policy steps aimed at bolstering the country’s tariff-hit economy. China’s central bank cut the key interest rates by 10 basis points to historic-low levels and lowered the reserve requirement ratio, which determines the amount of cash banks must hold in reserves, by 50 basis points.
U.S. President Donald Trump had ratcheted up tariffs on Chinese goods to prohibitive levels of 145%, prompting Beijing to retaliate with duties and other restrictive measures, such as export controls on its critical minerals.
On May 12, the economy got a relief after U.S. and China struck a preliminary deal in Geneva, Switzerland that led both sides to drop a majority of tariffs. Washington lowered its levies on Chinese goods to 51.1% while Beijing dropped taxes on American imports to 32.6%, according to think tank Peterson Institute for International Economics, allowing some room for both sides to negotiate a broader deal.
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