China’s producer prices fell 2.9% year-on-year in August 2025, easing from a 3.6% decline in July, which had marked the steepest drop since July 2023 and was in line with market expectations. This was the 35th consecutive month of producer deflation, but also the smallest decline since April, suggesting a gradual improvement in industrial demand amid government efforts to boost consumption. Production material costs declined at a softer pace (-3.2% vs -4.3% in July), with smaller contractions in mining (-11.5% vs -14.0%), raw materials (-4.1% vs -5.4%), and processing (-2.2% vs -3.1%) Meanwhile, consumer goods prices remained weak (-1.7% vs -1.6%), weighed down by food (-1.7% vs -1.8%) and durable goods (-3.7% vs -3.5%). Prices of clothing were unchanged (0.0% vs -0.1%), and prices of daily-use goods rose more slowly (0.4% vs 0.6%). In the first seven months of 2025, factory-gate prices shrank 2.9%. Month-on-month, the PPI was flat, after a 0.2% fall in the preceding month.