China’s consumer prices fell in April 2025 for the third straight month, with the Consumer Price Index (CPI) dropping 0.3% year-on-year, signaling persistent deflationary pressures in the world’s second-largest economy.
The decline, driven by a 5% fall in food prices and 10% drop in energy costs, reflects weak domestic demand, with retail sales growing only 2% in Q1 2025, per official data. China’s $18 trillion economy, targeting 5% growth in 2025, faces challenges from a property sector crisis, where 20% of housing projects remain stalled, and 15% youth unemployment, per 2024 statistics.
Core CPI, excluding volatile food and energy, rose 0.6%, down from 0.8% in March, indicating muted consumer spending, with 70% of households cutting discretionary purchases like electronics and travel. Producer prices, down 2.5% in April, reflect overcapacity in steel and solar panels, with 30% of factories operating below 50% capacity. The People’s Bank of China maintained a 3.1% benchmark rate, injecting $50 billion in liquidity, but 80% of economists surveyed predict further stimulus, including $200 billion in infrastructure bonds by Q3 2025.
Global impacts are significant, with China’s 20% share of world trade driving down commodity prices, affecting 10% of African exports like Nigerian oil, per 2024 OPEC data. Deflation, unseen since 2009, risks a 1% GDP contraction if prolonged, per 2024 IMF forecasts. Rural areas, housing 40% of China’s 1.4 billion people, saw 25% income declines, exacerbating urban-rural gaps. Beijing’s $1 trillion stimulus plan, targeting EVs and AI, aims to boost demand, but 60% of measures await implementation, leaving China’s recovery uncertain as 90% of global markets monitor its $3 billion daily trade flows.