The mainland's stubborn deflation showed signs of slight improvement last month as the rate of fall in prices held steady and consumer spending picked up.
However, the benchmark fixed-asset investment, which has largely driven the economy for the past year, continued to slow down last month, indicating that the previous round of government spending has run out of steam and the new round has yet to begin, economists said yesterday.
Last month, the benchmark retail price index fell 2.6 per cent year on year, the same fall as in July, while the consumer price index, which includes service prices, fell 1.3 per cent year on year, a slight improvement from a 1.4 per cent year-on-year fall in July.
Retail sales for last month, a main measurement of consumer demand, rose 6 per cent year on year to 241.1 billion yuan (about HK$224 billion) up from 5.6 per cent in July.
Last month was the 23rd straight month of falling prices.
Last year, Beijing spent 200 billion yuan through treasury bond issues and in bank loans to power the economy to grow by 7.8 per cent.
As the economy slowed to 7.1 per cent in the second quarter of this year, Beijing said it would invest another 300 billion yuan to boost the economy.
