Consumer prices increased in August — albeit by the slimmest of margins — following a decline in July, figures over the weekend showed, while the drop in factory-gate prices narrowed. Analysts expect officials this week will report a boost in loans last month as well.
The world’s second-largest economy is trying to regain traction as an ongoing property crisis and weak confidence drag on its recovery, creating risk for the government’s annual growth target of about 5%. Grim July data had shown consumer prices tipping into deflation and monthly loans plunged to a 14-year low, with authorities then stepping up efforts to revive activity.
While efforts to restore market confidence have prompted brief rallies in Chinese stocks, investors continue to wait for stronger turnaround signs. The benchmark CSI 300 Index is down more than 10% from its January high this year. The yuan also fell to its weakest since 2007 against the dollar last week, though it gained on Monday.
Global funds are holding the least Chinese stock positions since October, or back to where it was before the reopening rally took off in late 2022, according to a Morgan Stanley quant analysis last week.