China's Inflation Hits Zero, Misses Target Amid Deflation Fight

China's consumer prices showed no growth in 2025, missing the government's official target and highlighting persistent economic pressures. New data shows the Consumer Price Index (CPI), a key measure of inflation, was flat compared to 2024. This slowdown follows a 0.2 per cent increase the previous year. It also falls far short of Beijing's 2025 target of 2 per cent growth. At the same time, factory-gate prices, known as the Producer Price Index (PPI), fell by 2.6 per cent. This decline suggests lower prices for raw materials and manufactured goods. Economists see the numbers as a sign of lingering deflationary pressure. Deflation is a general decline in prices that can hurt business profits and economic growth. The data underscores the challenge for Chinese authorities to boost domestic demand and stabilize prices in 2026. The government has been focused on stimulating household spending and managing price wars among major manufacturers.