China CPI Slows To 1.4% In July

China's consumer-price index rose 1.4% in July from a year ago, compared with a 1.5% gain in June, the National Bureau of Statistics said on Wednesday.

Consumer price inflation (CPI) remains weak while upstream price pressures are moderating after a surge in the past year.

China's factory price inflation held steady in July in a positive sign for industrial output and profits for the third quarter, even though a government-led drive to reduce debt is expected to cool earnings and economic growth by year-end.

The producer price index, which gauges factory-gate prices, rose by 5.5 percent year-on-year in July, unchanged from June and May, according to the NBS.

The NBS said that food prices fell 1.1% over that period, offset by an increase in non-food inflation of 2.0%. On a month-on-month basis, it rose by 0.2 percent.

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Pork prices shed 15.5 percent year on year, and helped cut the CPI reading by 0.46 percentage points. Prices of commodities futures, such as steel rebar, started to rise in June through early this month, contributing to corporate profits.

Factory-gate prices rose in the ferrous metal mining and non-ferrous metal smelting industries, which widened to 2.7 percent and 1.5 percent from a month earlier, respectively, noted NBS senior statistician Sheng Guoqing.

China reported 6.9 percent GDP growth for the first half of 2017, exceeding the 6.7 percent rise in 2016 as well as beating the consensus of forecasters.

"We expect the PPI y/y to remain strong in the coming months, as the capacity reduction proceeds", said David Qu, markets economist at ANZ in a note to clients.