China's Deflation Trend Extends to 34th Month In July, Stocks Advanced Ahead of Tariff Deadline

Li Chen
11 Aug, 2025
Hong Kong

In a busy week of earnings, economic data, and tariff deadlines, stocks wavered around the flatline. 

The Hang Seng index edged up 0.2%, and the CSI 300 index increased 0.6%, as investors reviewed the latest inflation updates. 

China's consumer price inflation was flat in July following a 0.1% rise in June, the National Bureau of Statistics reported on Saturday.

The producer price inflation declined 3.6% in July, matching the rate in the previous month, marking the 34th month of deflation. 

Wholesale prices continue to decline amid a lack of demand driven by the persistent malaise in the property market and weakening job market. 

Investor sentiment was cautious ahead of the U.S. tariff deadline on Tuesday, and market watchers fear that the U.S. may slap an additional 25% "punitive tariff" on China for its continued import of Russian oil. 

At present, the U.S. import duty averages 50% on Chinese goods and may incur additional duties of 25%. 

On Friday, China's statistical agency is set to release monthly updates on retail sales, industrial output, and fixed-asset investments 

This week, investors are awaiting the release of quarterly results from NetEase, JD.com, Tencent Holdings, and Galaxy Entertainment.

 

China Indexes and Stocks 

The Hang Seng index increased 0.2% to 24,906.74, and the CSI 300 index added 0.6% to 4,128.72. 

Lithium mining companies soared after CATL announced its plans to suspend mining operations at Jianxiawo mine for at least three months. 

Tianqi Lithium Corp. soared 15% to HK $47.2, and Ganfeng Lithium Group added 19.7% to HK $33.66. 

Ab&B Bio-Tech soared 160% to HK $33.62 after the Chinese vaccine maker priced its initial public offering at HK $12.90 per share. 

The mainland-based biotech company sold 33.44 million shares and raised gross proceeds of HK $431.4 million.