China's headline producer price index fell 2.7 percent on the year in April, weakening further from the 2.5 percent decline recorded in March. Headline PPI inflation has been in negative territory since late 2022. The index fell 0.4 percent on the month, as it did previously. Consumer price data also published today showed headline inflation remained in negative territory in April.

Today's data were in line with the consensus forecast. The China RPI and RPI-P fell from plus 23 to plus 14 and plus 20 respectively, indicating that recent Chinese data in sum are still coming in well above consensus forecasts.

Producer prices in China are forecast have posted a deeper 2.7% drop on year in April after factory gate deflation worsened to 2.5% in March from 2.2% the previous month. Ahead of bilateral talks with U.S. officials in Geneva, Switzerland, this week, China has announced stimulus measures designed to cushion a blow to its economy from U.S. President Donald Trump's trade war, which is increasing upside risks to inflation and downside risks to growth for major economies.

Beijing's central bank governor and other top financial officials outlined plans Wednesday to cut interest rates and reduce bank reserve requirements to help free up more funding for lending. The government will also raise the amount of money available for factory upgrades and other innovation, and for elder care and other service businesses. Trump tariffs, set as high as 145% on imports from China, have begun to take a toll on the country's export-dependent economy at a time when it's already under pressure from a prolonged downturn in the property sector. China has retaliated with tariff hikes of up to 125% on U.S. goods and stopped buying most American farm products.

The Producer Price Index (PPI) measures the change in the price of goods purchased and sold by producers. The industrial producer price index reflects the trend and level of prices change when the products are sold for the first time. The industrial purchaser price index reflects the trend and level of prices change for the products purchased by the industrial enterprises as intermediate inputs.

It is a leading indicator of consumer inflation - when producers pay and charge more for goods the higher costs are usually passed on to the consumer.

The PPI measures the industrial products price changes for the domestic market. Unlike most other countries, China only produces a comparison with the same month in the previous year but not with the previous month. The PPI covers all manufacturing activities. The prices include excise taxes but exclude VAT. The industry breakdown for the PPI follows China's Industrial Classification of the National Economy. The data include a 38 industry breakdown and are not adjusted for seasonality. They are available by the 20th of the month following the reference month and are published in the daily NBS paper"China Information".

The statistical survey of industrial producer prices covers prices for over 11,000 products from 1702 subclasses, 191 groups; and the statistical surveys of industrial purchaser prices cover prices for over 6,000 industrial products from over 900 subclasses. Industrial producer prices are collected from combined surveys of key businesses and typical businesses. Starting from 2011, the key businesses are those with their turnover from primary activities over 20 million yuan, and the typical businesses are those with less than 20 million yuan. The surveys cover about 60,000 industrial enterprises in over 400 cities across the country.