China’s producer prices fell 0.9% year-on-year in February 2026, easing from a 1.4% decline in January and better than market expectations of a 1.1% drop. It marked the mildest decline since July 2024, buoyed by stronger prices in advanced and emerging sectors and by capacity management in key industries. Chinese Premier Li Qiang said that Beijing’s aim for “an appropriate rebound” in prices is one of the key considerations for monetary policy. Prices for production materials fell at a slower pace (-0.7% vs -1.3% in January), with deflation easing for raw materials (-1.9% vs -2%) and intermediate goods (-5.3% vs -8.1%), while prices recovered for processed goods (0.3% vs -0.4%). Consumer goods prices also declined more gradually (-1.6% vs -1.7%), particularly for clothing (-1.0% vs -0.7%), food (-1.8% vs -1.9%), and durable goods (-1.6% vs -1.8%), while deflation for daily-use items remained steady at 1.8%. On a monthly basis, producer prices stood at 0.4%, unchanged from January.

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