Story perspectives

China Faces Ongoing Deflation as Consumer Prices Drop Again

10/16/2025

Summary

Story summary

In September 2025, China's consumer prices (CPI) fell 0.3% year-on-year and producer prices (PPI) declined 2.3%, the 36th straight month of declines.
The pace of PPI decline eased from August, aided by higher gold prices.
Core inflation stabilized at 1 percent, a 19-month high, while overall demand remained weak.
Analysts expect continued deflationary pressures and renewed policy support as the economy grapples with structural challenges and weak consumer confidence.

History

Historical Context

The Great Depression began with the Wall Street Crash in October 1929, leading to a global economic downturn. By 1932, unemployment in the U.S. soared to 25%, and industrial production fell nearly 45%. The Federal Reserve's contractionary policies worsened deflation, highlighting the need for effective economic interventions, a lesson echoed in today's economic challenges, including China's ongoing deflationary struggles.

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Story summary

In September 2025, China's consumer prices (CPI) fell 0.3% year-on-year and producer prices (PPI) declined 2.3%, the 36th straight month of declines.
The pace of PPI decline eased from August, aided by higher gold prices.
Core inflation stabilized at 1 percent, a 19-month high, while overall demand remained weak.
Analysts expect continued deflationary pressures and renewed policy support as the economy grapples with structural challenges and weak consumer confidence.

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