China struggles to shake off deflationary pressures as consumer prices edge higher

China's GDP deflator, a broad gauge of price levels, has been in negative territory for six quarters

- The Wall Street Journal

China's consumer prices edged up in October, while factory-gate prices continued to decline, underscoring the challenges Beijing faces in battling deflationary pressures despite a recent stimulus push.

China's consumer-price index rose 0.3% from a year last month, compared with the 0.4% gain seen in September, according to data released Saturday by the National Bureau of Statistics. Economists polled by The Wall Street Journal had expected a 0.4% increase.

The producer-price index, meanwhile, fell 2.9% in October, for a 25th straight month of decline. That was steeper than the prior month's 2.8% drop and the 2.6% decline that economists had been expecting.

The inflation figures land as China has seen some signs of stabilization in its economy after policymakers' late-September pivot to more robust stimulus support to revive growth following months of more tepid measures.

Saturday's lukewarm readings on prices, however, suggest Beijing still has work to do if it hopes to jolt private confidence and lift the world's second-largest economy out of its current deflationary trajectory.

"Deflationary pressure is clearly persistent in China," said Zhiwei Zhang, Chief Economist at Pinpoint Asset Management when commenting on the inflation data.

China's gross domestic product deflator, a broad gauge of price levels across the economy, has now been in negative territory for six consecutive quarters. That has raised concerns among economists that China might follow what are widely regarded as policy mistakes by Japan during the 1990s, when a lack of policy support after that decade's bursting of asset bubbles led to an extended period of stagnation.