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China's producer price index falls to -0.3pc in July, hit by trade war

CHINA's exports to the US declined by 8

China's producer price index falls to -0.3pc in July, hit by trade war

CHINA's exports to the US declined by 8

12 August 2019 - 19:00

CHINA's exports to the US declined by 8.1 per cent in the first half of the year to US$199.4 billion, while imports from the US plummeted by 29.9 per cent to $58.9 billion.

The ongoing US-China trade war is compelling manufacturers in China to sell their products at a discount, pushing prices into deflationary territory in July, reported Hong Kong's South China Morning Post.



The Producer Price Index (PPI) that shows the prices that factories charge wholesalers for their products, dropped to -0.3 per cent year on year, falling below June's flat reading.



This demonstrates that manufacturers in China are coming under pressure from the tariffs the United States has imposed on Chinese imports.



PPI last dropped into negative territory in August 2016, having remained in deflationary territory for 54 straight months since March 2012.



One big concern is the negative economic impact if price decreases become entrenched, and wholesalers postpone their purchases in anticipation of lower prices in future.


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