Chinese consumer prices continue to fall as US trade talks loom

China has struggled to assistance sluggish home depletion since the extremity of the pandemic, threatening authoritative maturation targets. Photo: STR / AFP
Source: AFP

Chinese user prices fell for the 4th consecutive period successful May, information showed Monday, arsenic the world's 2nd biggest economy struggles with sluggish spending and planetary commercialized turmoil.

Beijing has failed to boost sluggish home depletion since the extremity of the pandemic, threatening authoritative maturation targets and complicating its quality to shield its system from US President Donald Trump's tariff blitz.

Representatives from the 2 countries are expected to conscionable connected Monday successful London for much high-stakes commercialized talks being intimately watched for signs of a lasting woody connected reducing levies.

China's user terms scale -- a cardinal measurement of ostentation -- dropped 0.1 percent twelvemonth connected twelvemonth successful May, according to statistic published Monday by the National Bureau of Statistics (NBS).

The speechmaking was unchanged from April but somewhat amended than the 0.2 percent autumn forecast successful a Bloomberg survey of economists.

While deflation suggests the outgo of goods is falling, it poses a menace to the broader system arsenic consumers thin to postpone purchases nether specified conditions, hoping for further reductions.

A deficiency of request can past unit companies to chopped production, frost hiring oregon laic disconnected workers, portion perchance besides having to discount existing stocks -- dampening profitability adjacent arsenic costs stay the same.

"China continues to look persistent deflationary pressure," Zhiwei Zhang, president and main economist astatine Pinpoint Asset Management, wrote successful a note, adding that Beijing "needs to trust connected home request to combat the deflation".

Zhang said exports continued to execute good and enactment the economy, portion informing that they volition "probably dilatory arsenic the frontloading fades out" -- a notation to overseas buyers expanding shipments up of perchance higher tariffs.

Trade figures for past period owed aboriginal connected Monday volition besides shed airy connected however the country's exporters are faring.

Deepening a slump that has present lasted much than 2 years, mill gross prices besides dropped successful May, the NBS said Monday.

The shaper terms scale declined 3.3 percent, accelerating from a 2.7 percent driblet successful April, and faster than the 3.2 percent estimated successful the Bloomberg survey.

The China-US talks successful London volition people the 2nd circular of ceremonial negotiations betwixt the world's 2 largest economies since Trump launched his planetary commercialized blitz successful April.

The archetypal circular of talks was held successful mid-May successful Geneva and saw them intermission sky-high tariffs but neglect to scope a sweeping commercialized deal.

The latest negotiations are expected to see Chinese Vice Premier He Lifeng, US Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick.

They were announced aft a telephone telephone past week betwixt Trump and Chinese President Xi Jinping, which the US president described arsenic "very good".

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Source: AFP