China

zhongguo

中国

economy

jingji

经济

inflation

tonghang

通胀

rebound

fantán

反弹

ends

jieshu

结束

deflation

tongsuō

通缩

cycle

zhouqi

周期

。

New Words

News in English

China Inflation Reverses After Three Years of Deflation

China ended its record deflationary run in the second quarter of 2026 as the GDP deflator rose 1.6 percent after three years of contraction, though growth remains uneven.

China showed positive economic signals in the second quarter of 2026 as the GDP deflator rose 1.6 percent, ending a record three-year deflationary period. However, this rebound was primarily driven by rising global energy prices rather than domestic demand. Domestic consumption growth remained slow and weak, with household wealth continuing to be affected by the sluggish real estate sector. The manufacturing sector benefited from the global AI investment boom, with high-tech manufacturing growing 13.1 percent year-on-year. Yet the overall economic growth rate fell to its slowest pace since 2022, reflecting the ongoing challenges in domestic demand recovery and the uneven nature of China growth.

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