Jakarta –
The Chinese industry has fallen into deflation with the worst level in the last 2 years. This condition is due to the second largest economy in the world wrestling with the uncertainty of the global trade war and weakening domestic demand.
Although consumer prices rose for the first time in five months, the increase was only a little due to a prolonged decline in the housing market in China. This adds to other obstacles, followed by US President Donald Trump on trading partners.
Quoted from Reuters on Wednesday (9/7/2025), the producer price index fell 3.6% in June compared to the previous year, worse than the 3.3% decline in May and the biggest decline since July 2023. This figure was compared to the estimated decline of 3.2% in Reuters polls.
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NBS statistical, Dong Lijuan, said that a number of export -oriented industries in China are under price pressure.
“Uncertainty in the global trade environment has influenced the expectations of the company’s exports,” said Dong.
Factory activity shrank for the third month in a row in June, although with a slower rate, with employment and new export orders are still sluggish.
“We estimate the demand will weaken later this year, because exports are slowing down and the encouragement of fiscal support is reduced,” said Chinese economist at Capital Economics, Zichun Huang.
Because weak domestic demand is still a burden on the Chinese economy, companies use price discounts to increase sales. This condition encourages the authorities to urge the end of a detrimental price war in the automotive industry.
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(stable/ord)
