Consumer prices in China have stalled once again as the country's economic downward spiral continues.
Prices remained in deflationary territory for the third consecutive month in December.
It comes as the superpower has been looking to bounce back from the impact of the Covid pandemic.
However, according to official statistics released on Friday, the country’s consumer price index fell 0.3 per cent in December year on year, producer prices dropped by 2.7 per cent.
China has been looking to bounce back from the impact of the Covid pandemic
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China’s economy was hit by deflation in July and prices have since been flat or fallen in every month except August. November’s decline of 0.5 per cent marking the steepest drop in three years.
However, deflation is just one of the economic challenges facing Beijing.
President Xi's government has sought to loosen critical lending rates to try to counter a prolonged slowdown in a property sector, something which usually accounts for more than a quarter of economic activity.
It comes as the country's strict anti-pandemic policies continue to have a knock on impact on fragile consumer sentiment, despite being lifted over a year ago.
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China’s producer price index, which reflects factory gate prices and is strongly affected by the global cost of raw materials and commodities, has declined every month since October 2022
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Meanwhile, China’s producer price index, which reflects factory gate prices and is strongly affected by the global cost of raw materials and commodities, has declined every month since October 2022.
Shadow banking conglomerate Zhongzhi declared bankruptcy last week, six months after missed payments came to light.
The People’s Bank of China is expected on Monday to cut its medium-term lending facility for the first time since August.
This is a policy tool that allows the state owned bank to inject liquidity into the financial system.
Earlier this week, Chinese stocks hit a five-year low as onshore equity benchmark has been pushed to its lowest in nearly five year.
Bloomberg reported on Monday the CSI 300 benchmark fell 1.3 per cent to close at its lowest since February 2019.
The gauge has declined in every session this year to shed over four per cent becoming one of the world’s worst-performing major equity indexes.