China's July Producer Price Index (PPI) fell 3.6% y-o-y, a larger decline than expected, while the Consumer Price Index (CPI) remained flat y-o-y. SMU Associate Professor of Finance Fu Fangjian said that the latest CPI figures remain low, indicating that the Chinese economy has not yet completely escaped deflationary pressures, and that policies to boost domestic demand still have room for improvement. Assoc Prof Fu said that investing in large-scale projects, such as the Yalong River Hydropower Station, will help drive demand for raw materials and cement and building materials, which will in turn help boost the PPI.
