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Chinese inflation rises to 0.6% YoY, falling short of forecasts

In August, Chinese consumer inflation rose slightly to a six-month high of 0.6% YoY, up from 0.5% in July, but fell short of the 0.7% forecast. This modest increase, driven by higher vegetable prices despite falling energy costs, has done little to alleviate concerns about sluggish consumer spending in China. While the country has been combating deflation, with factory-gate prices dropping 1.8% YoY, officials are working to boost domestic activity amid ongoing property sector issues and trade frictions. The government aims for around 5% annual economic growth, but challenges such as high youth unemployment and a struggling property market make this target ambitious.

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