China's consumer price index rose 0.5 per cent year-on-year in July, the National Bureau of Statistics reported Aug 9, below a Bloomberg survey forecast of 0.8 per cent and the slowest increase since January. Factory-gate prices also grew slower than expected, rising 3.5 per cent from 4.1 per cent in June and below the 3.8 per cent forecast.

Zhiwei Zhang, chief economist at Pinpoint Asset Management, said the figures show "economic momentum softened" in the second quarter, noting that a late-July meeting of the Communist Party's Politburo signalled "stronger fiscal spending as the policy response" but that "a couple of months are needed to assess how it may boost domestic demand."

Sluggy domestic consumption has weighed on growth for years even as exports and high-tech sectors boom. The slowdown comes two days after July trade data showed exports and imports soaring, boosted by demand for AI-related technology products.

– AFP The Straits Times reports.