China’s economic landscape in October 2025 presented a nuanced picture as factory-gate deflation showed signs of easing while consumer prices returned to positive territory. According to data released by the National Bureau of Statistics (NBS), the Producer Price Index (PPI) fell by 2.1% year-on-year, marking a moderation from the 2.3% decline in September. This marks the 37th consecutive month of deflation in producer prices, though the rate of decline has slowed. Meanwhile, the Consumer Price Index (CPI) rose by 0.2% year-on-year, reversing a two-month downward trend and surpassing market expectations of no change. Core inflation, excluding volatile food and energy prices, accelerated to 1.2%, the highest in 20 months. Food prices, however, continued to decline, dropping 2.9% year-on-year. The data suggests that government efforts to manage overcapacity and stabilize supply-demand dynamics are yielding results, but weak domestic demand and geopolitical uncertainties continue to weigh on the economy. Analysts caution that deflationary pressures persist, and further policy measures may be required to stimulate growth. Policymakers have maintained a cautious stance, refraining from aggressive stimulus measures, with the central bank keeping interest rates steady for five months. Despite these challenges, China remains on track to achieve its annual growth target of around 5%.