China’s deflation warning sends signals across global markets

As the world’s second-largest economy, China is always under scrutiny, and recent data on its consumer and producer prices should raise eyebrows beyond Beijing. In January, China’s Consumer Price Index (CPI) rose a mere 0.2 percent year-on-year, a slowdown from December’s 0.8 percent. Meanwhile, the Producer Price Index (PPI) fell by 1.4 percent, signaling persistent deflationary pressure in the industrial sector. These numbers may seem small, but their implications are profound, both for China and the global economy.