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An aerial view captures the self-propelled jack-up wind power installation platform “Huaxia Honghu 01,” which was delivered at CIMC Raffles’ facility in Yantai, Shandong Province, China, on March 6, 2025.
China has recently experienced a notable shift in its economic indicators, as the national consumer price index (CPI) for February has entered a contraction phase for the first time since January of the previous year. This drop is primarily due to a decrease in prices across essential categories, including food, tobacco, and alcohol.
According to data released by the National Bureau of Statistics of China, the CPI declined by 0.7% on a year-over-year basis, contrasting sharply with a 0.5% increase reported in January. This latest figure fell short of economists’ expectations, which anticipated a smaller annualized contraction of about 0.5%, based on a Reuters survey.
On a monthly basis, the CPI showed a decrease of 0.2% in February, following a 0.7% increase in January. This withdrawal from inflationary territory comes amidst growing scrutiny from investors regarding the effectiveness of China’s governmental stimulus measures aimed at rejuvenating the economy.
In its recent announcements, the Chinese government established a GDP growth target of “around 5%” for 2025, emphasizing a strategic focus on stabilizing economic performance by enhancing domestic demand. Furthermore, Beijing has adjusted its annual consumer price inflation target to “around 2%”—the lowest in over twenty years—down from the prior threshold of 3% or higher, as detailed by the Asia Society Policy Institute. This revision suggests that the new inflation goal will serve more as a ceiling rather than an aspirational target.
Experts warn that reaching the around 5% growth target for this year could prove to be particularly difficult. Contributing factors include persistently low domestic consumption and the ongoing tensions stemming from trade disputes with the United States under the Trump administration.
— Contributions to this report were made by CNBC’s Evelyn Cheng & Anniek Bao.
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