Latest news with #deflation
CNA
2 days ago
- Business
- CNA
China's top leaders vow crackdown on price wars as deflation risks mount
BEIJING: China's top leaders pledged on Tuesday (Jul 1) to step up regulation of aggressive price-cutting by Chinese companies, state news agency Xinhua reported, as the world's second-biggest economy struggles to shake off persistent deflationary pressures. Overcapacity among Chinese manufacturers and the price cuts made to clear stock, have sparked price wars that are showing signs of influencing consumer behaviour. Analysts worry this could drive further reductions, raising concerns that deflation may become entrenched and hinder efforts to stabilise the US$19 trillion economy. "Enterprises engaging in disorderly low-price competition must be regulated in accordance with laws and regulations," Xinhua quoted a meeting of the Central Financial and Economic Affairs Commission as saying. The commission is a top economic policy body of the ruling Communist Party and is chaired by President Xi Jinping. "Businesses should be guided to improve product quality and support the orderly phasing out of outdated production capacity," the Xinhua report added. Data showed on Monday that manufacturers were slashing prices to attract buyers, as US President Donald Trump's tariff onslaught threatens the long-term viability of selling to the United States, the world's top consumer market, and domestic demand remains weak. While new orders edged up, factory gate prices remained in the doldrums, the data showed, suggesting that the economy risks getting stuck in a cycle of ever-lower prices. A front-page editorial published on Sunday in the Communist Party's official newspaper, People's Daily, drew significant attention for its call for China's economy to "break free from 'rat race-style' competition" among firms. The article concluded that relentless price-cutting fostered destructive competition that defied economic principles and had clear negative economic consequences.
Reuters
2 days ago
- Business
- Reuters
China's top leaders vow crackdown on price wars as deflation risks mount
BEIJING, July 1 (Reuters) - China's top leaders pledged on Tuesday to step up regulation of aggressive price-cutting by Chinese companies, state news agency Xinhua reported, as the world's second-biggest economy struggles to shake off persistent deflationary pressures. Overcapacity among Chinese manufacturers and the price cuts made to clear stock, have sparked price wars that are showing signs of influencing consumer behaviour. Analysts worry this could drive further reductions, raising concerns that deflation may become entrenched and hinder efforts to stabilise the $19 trillion economy. "Enterprises engaging in disorderly low-price competition must be regulated in accordance with laws and regulations," Xinhua quoted a meeting of the Central Financial and Economic Affairs Commission as saying. The commission is a top economic policy body of the ruling Communist Party and is chaired by President Xi Jinping. "Businesses should be guided to improve product quality and support the orderly phasing out of outdated production capacity," the Xinhua report added. Data showed on Monday that manufacturers were slashing prices to attract buyers, as U.S. President Donald Trump's tariff onslaught threatens the long-term viability of selling to the United States, the world's top consumer market, and domestic demand remains weak. While new orders edged up, factory gate prices remained in the doldrums, the data showed, suggesting that the economy risks getting stuck in a cycle of ever lower prices. A front-page editorial published on Sunday in the Communist Party's official newspaper, People's Daily, drew significant attention for its call for China's economy to "break free from 'rat race-style' competition" among firms. The article concluded that relentless price-cutting fostered destructive competition that defied economic principles and had clear negative economic consequences.
Bloomberg
5 days ago
- Business
- Bloomberg
China's Central Bank Says Economy Is on Positive Track But Challenges Persist
China's economy is showing positive signs and confidence is building, but challenges such as insufficient domestic demand and deflationary pressure persist, according to the country's central bank. The People's Bank of China, in a statement after its quarterly monetary policy committee meeting, said it will adopt a flexible approach to policymaking, taking into account both domestic and international conditions. Monetary policy will remain 'moderately loose,' with the aim of maintaining stable economic growth and prices within a reasonable range, it said.
CNA
6 days ago
- Business
- CNA
China's industrial profits slip back into sharp decline in May
BEIJING: China's industrial profits swung back into a sharp decline in May from a year earlier, as factories slowed activity in the face of broader economic stress and a fragile trade truce with the United States. Deepening deflationary pressures and a persistent property crisis continued to undercut demand and economic growth despite an unexpected pickup in retail growth last month. Profits at China's industrial firms fell 9.1 per cent in May from a year earlier, snapping a two-month growth streak, National Bureau of Statistics data showed on Friday (Jun 27). Industrial profits slid 1.1 per cent in the first five months of 2025 from the same period last year. This compares with a 1.4 per cent increase in the January-April period. The profit decline was due to "insufficient effective demand, declining prices of industrial products and fluctuations in short-term factors", said NBS statistician Yu Weining. With US tariffs set to remain high, factories are facing immense strains, particularly in sectors such as autos where excessive competition has prompted an official call to end bruising price wars. Local auto dealers have appealed for automakers to stop dumping cars on dealerships, saying the intense price war was damaging their cash flow, driving down their profitability and forcing some to shut. Profits at state-owned firms dropped 7.4 per cent in the first five months. Private-sector companies recorded a 0.3 per cent increase and foreign firms saw a 3.4 per cent rise, according to a breakdown of the official data.
Yahoo
6 days ago
- Business
- Yahoo
China's industrial profits slip back into sharp decline in May
BEIJING (Reuters) -China's industrial profits swung back into a sharp decline in May from a year earlier, as factories slowed activity in the face of broader economic stress and a fragile trade truce with the United States. Deepening deflationary pressures and a persistent property crisis continued to undercut demand and economic growth despite an unexpected pickup in retail growth last month. Profits at China's industrial firms fell 9.1% in May from a year earlier, snapping a two-month growth streak, National Bureau of Statistics data showed on Friday. Industrial profits slid 1.1% in the first five months of 2025 from the same period last year. This compares with a 1.4% increase in the January-April period. The profit decline was due to "insufficient effective demand, declining prices of industrial products and fluctuations in short-term factors," said NBS statistician Yu Weining. With U.S. tariffs set to remain high, factories are facing immense strains, particularly in sectors such as autos where excessive competition has prompted an official call to end bruising price wars. Local auto dealers have appealed for automakers to stop dumping cars on dealerships, saying the intense price war was damaging their cash flow, driving down their profitability and forcing some to shut. Profits at state-owned firms dropped 7.4% in the first five months. Private-sector companies recorded a 0.3% increase and foreign firms saw a 3.4% rise, according to a breakdown of the official data. Industrial profit numbers cover firms with annual revenue of at least 20 million yuan ($2.78 million) from their main operations.
