China’s consumer prices increased by 0.5% YoY in July, exceeding forecasts of a 0.3% rise and marking the largest increase since February. Despite this, consumer price growth has remained weak over the past year due to persistent deflation concerns, driven by a prolonged property slowdown and intense industry competition. Producer prices fell 0.8% YoY in July, consistent with the previous month, while core inflation, excluding food and energy, rose by 0.4%. Analysts, such as ING’s Lynn Song, highlight that while food prices contributed to the CPI increase, other areas, including transportation and communications, have seen price declines. Ongoing issues in the real estate sector and recent unexpected lending rate cuts are also contributing to the current economic landscape.