China’s producer prices continue to fall in September, signalling prolonged

A poll of 50 economists conducted by Reuters is suggesting that China’s third quarter GDP is likely to slow to 6.8 percent, down from 7 percent in the second quarter. That was down of from August’s 2 percent increase.

On Wednesday, the government said that consumer inflation cooled more than expected in September and producer prices extended their slide to a 43rd straight month.

China is battling a property downturn, industrial overcapacity, sluggish demand and weak exports, which dragged growth down to 7% for the first half of the year. On the flip side, a few economists buck that view and believe consumption and service-sector growth are being underestimated by the government.

Asian stocks traded lower again today (October 14th), led by a weak overnight session on Wall Street, as investors reacted to disappointing China inflation data, a day after the release of weak China trade data.

The wake-up call has slammed other emerging economies, delayed a move by the United States to raise interest rates and sent prices of commodities such as copper and oil, which China imports on a massive scale, plummeting to multi-year lows.

Growth in the quarter ending in June held steady at 7 per cent. But that was the lowest level since the 2008 financial crisis and analysts said a stock market boom pushed up activity in financial industries, masking declines in other industries.

Other support measures have included more government spending on infrastructure and easing down payment requirements and other curbs on the cooling property sector, which have succeeded in reviving weak home sales and prices but have not yet reversed a sharp decline in new construction which is weighing on demand for materials from cement to steel. Annual inflation is forecast to average 1.6 percent this year, versus the government’s 2015 target of 3 percent, before quickening to 2 percent next year.

The AFP survey showed economists expect China’s economy to grow 6.9 percent this year, missing the target – though the qualifier of “about” would allow Beijing’s leaders to declare victory. The country’s imports fell more than 20 percent in September, falling far short of analyst forecasts.