Falling prices fuel deflation fears

Struggling to recover: A snack vendor in Shanghai. China’s CPI fell 0.5% in November – the biggest drop since 2020. — AFP

HONG KONG: China’s consumer prices fell at the steepest pace in three years while producer costs dropped even further into negative territory, underscoring the challenges facing the country’s economic recovery.

The consumer price index (CPI) fell 0.5% last month from a year earlier, the National Statistics Bureau said in a statement last Saturday. That’s the biggest drop since November 2020 and is weaker than the 0.2% drop projected by economists in a Bloomberg survey.