China’s Inflation Split Signals Uneven Recovery as Markets Watch Fed Moves
China's latest inflation data paints a bifurcated picture: consumer prices ROSE 0.7% year-on-year—the sharpest increase in two years—while producer prices extended their deflationary streak with a 2.2% decline. This divergence underscores the fragility of domestic demand despite government stimulus measures.
Asian markets reacted swiftly, with the Hang Seng and CSI 300 dipping as investors digested the implications. The persistent factory-gate price weakness suggests manufacturing oversupply continues to drag on economic momentum, particularly in coal and energy sectors.
All eyes now turn to December's Central Economic Work Conference for signals about Beijing's 2026 policy direction. As one Shanghai-based analyst noted: 'The economy walks a tightrope between stimulus and structural reform.'
