China CPI Rises, PPI Falls Amid Trade War

China's Consumer Price Index (CPI) rose 0.1% year-on-year in June 2025, ending four months of decline and slightly exceeding expectations. The rebound was driven by a smaller decrease in energy prices and increased demand for gold and platinum jewelry, while food prices stayed negative and transportation costs fell sharply. The Producer Price Index (PPI) dropped 3.6% year-on-year, marking the 33rd consecutive month of producer deflation and reflecting persistent industrial oversupply and weak demand. Ongoing challenges are compounded by a trade war with the US, which is hindering economic recovery. Policymakers have responded with support measures and may further ease monetary policy, including potential rate cuts later in the year. Analysts emphasize the need for structural reforms to address excessive price competition and promote market consolidation.