China Reports Worst Producer Deflation in 2 Years Amid Ongoing Trade Uncertainty

Analysts said they expect more subdued domestic demand and trade tensions with the U.S.

A worker moves pieces of steel machinery at a manufacturing company in Hangzhou, Zhejiang Province, China, on June 16, 2025. AFP via Getty Images

China’s factory-gate prices in June saw the biggest fall in two years amid uncertainty in international trade and weak domestic demand.

According to figures released on July 9 by China’s National Bureau of Statistics, the producer price index for industrial products in June fell by 3.6 percent compared with the same month in 2024—worse than a 3.3 percent drop in May, and the biggest annual decline since July 2023.