China's consumer inflation rate held steady in July, producer prices fell deceleration in a new flag in the world's second largest economy downturn may be stable.
Consumer price index in July rose 2.7 percent from a year earlier, and June's increase of less than 3.5% of the government's annual target, data showed on Friday. Food prices rose by 5%.
Producer price index or commodity prices, as they leave the factory, representing a decrease of 2.3%. However, this is less than the 2.7% decline in June, suggesting sluggish demand, resulting in a steady decline in producer prices, more than a year, it may be strengthened.
Alaistair Chan Moody's analysts said in a report, "July inflation figures" slightly lower than expected, which means that China's demand is still in the soft side. "Producer prices are still in deflation in July, although there are some improvements, compared with June."
Consumer price inflation in the politically sensitive Chinese Communist leaders, because it weakens the economic interests and consolidate the ruling party's monopoly on power. But the upward pressure on prices has been relatively low because supply exceeds demand in many industries weak.
Muted inflation also gives Beijing room to cut interest rates or higher government spending to stimulate the economy, if needed. Authorities have tax cuts for small businesses and to strengthen the railway construction spending to stimulate economic growth, but the overall stimulation to withstand the pressure plate.
China's economic growth dropped to a low of two years from 7.5% in the second quarter, but the latest data show that trade and industry slowdown may be stable.
July imports surged 10.9 percent from a year earlier, in a sign of stronger domestic demand in China.
"A strong increase in imports of goods in July, indicating that the investment recovery may contribute to the investment in railways official fulcrum, said:" Mr Moody.
Communist leaders have ordered the closure of some factories to reduce overcapacity in steel, cement and glass industries, including companies. This may help restrain inflation, but there are abused and forced some of the company's financial bankruptcy price war.
Premier Li Keqiang said in June, there is little short-term measures to stimulate the economy, such as higher government spending of space. He said that Chinese leaders will focus on reforms aimed at supporting entrepreneurs and encourage domestic consumption in order to reduce China's dependence on exports and investment.
Government efforts to curb lending and sales of cooling surging housing costs have helped slow the rise in prices, but also hurt the buyers purchase furniture, appliances and other goods.
 



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