China's consumer prices fall in February on weak demand

A burgeoning trade war with the US could add to China’s economic challenges, which include a prolonged real estate market crisis that is weighing on consumer confidence

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Consumer prices fell in China in February for the first time in I3 months, as persistent weak demand was compounded by the early timing of the Lunar New Year holiday.

The National Bureau of Statistics said Sunday that the consumer price index dropped 0.78 in February compared with a year ago. Onamonthly basis, prices were down 0.28 from January.

While many other countries wrestle with inflation, China's policymakers face flat to falling prices, and the possibility they could evolve into a deflationary spiral that would drag down the economy, The government stressed the need to increase domestic demand and consumer spending in an annual report last week to its ceremonial legislature, the National People’s Congress, but held back on unveiling any dramatic new steps to boost the economy.

The Lunar New Year, a time when spending rises for travel, dining out and entertainment, came in late January this year instead of February, as it’s based on the cycles of the moon. Holiday spending helped drive the consumer price index up ©.58 in January, but it then fell last month compared with 2094's elevated level.

Factoring out the impact of the holiday, the index rose O.I8 last month, Dong Lijuan, a statistician at the government's statistics bureau, said in a written analysis.