China is teetering on the brink of deflation amid <a href="https://www.telegraph.co.uk/business/2023/01/18/why-chinas-best-days-already-behind/">mounting concerns about the health of the world’s second largest economy</a>.

Consumer price inflation (CPI) fell to zero in the year to June after a sharp fall in pork prices. The official figure was the weakest reading since February 2021 and below economists’ estimates of a 0.2pc annual rise in CPI.

Producer prices also fell by 5.4pc in June, marking the ninth straight monthly decline and the steepest fall since the end of 2015.

China has struggled to break out of <a href="https://www.telegraph.co.uk/business/2023/06/06/beijing-tells-banks-to-cut-saving-rates-to-boost-economy/">an economic malaise caused by draconian zero-Covid policies</a> that were only scrapped at the end of last year.

Sharp fall in pork prices sees inflation hit zero as economic woes mount{ai:summary}<p>#economy China's economy is in trouble as it faces the threat of deflation. Consumer price inflation dropped to zero, while producer prices fell by 5.4%. The country's strict zero-Covid policies have hindered economic recovery.</p>

China on brink of deflation as prices plunge

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