China retail prices inch up, deflation fears grow

China's core inflation cooled to the weakest in over three years, fuelling calls for more efforts to boost household spending as weak demand mounted pressure on the annual growth target.

The consumer price index excluding volatile food and energy costs rose just 0.3% in August from a year earlier, the least since March 2021, the National Bureau of Statistics said. The broader CPI rose 0.6%, missing expectations even as it was buoyed by higher food costs due to bad weather last month.

Taken together, the figures provide more evidence of weak consumer demand, prompting calls for more measures to stave off a negative cycle of declining corporate revenue, wages and spending. "The deflationary pressure in China is getting more entrenched," Michelle Lam, Greater China economist at Societe Generale.