China slips into deflation

The news: China's Consumer Price Index dropped 0.3% in the year to July, dampening hopes for a post-COVID rebound in the world's second-largest economy.

The numbers: The data was underscored by a 4.4% year-on-year drop in producer prices, a 12.4% fall in imports and a 14.5% slip in exports, the steepest since the onset of the COVID-19 pandemic in February 2020.

The context: While China's economic growth has been improving for most of the calendar year, weak domestic and global demand and extended drops in commodity prices are taking steam out China's economic recovery.