Chinese consumer prices fall by 1.6 per cent

Chinese consumer prices fell by 1.6 % for the first time in over 6 years in February, down from a rises of 1% in January.

The drop raised fears that China may be heading for a deflationary phase, even though the Chinese government has targeted a headline inflation rate of 4% for the year.

China, however, grabbed global headlines for non-economic reasons. China escalated its spat with the US over an incident involving the US Navy and Chinese ships, accusing the Americans of violating international and Chinese law, in response to a US complaint that its ship was harassed in international waters.

At the same time, it continued a clampdown on Tibet, virtually shutting down parts of the country in order to maintain law and order during the anniversary of Dalai Lama���s flight to India.