Deflationary Pressures Persist as China Stocks Dip

China's stocks declined as persistent deflationary pressures persisted despite government efforts to boost consumption. Official data showed minimal growth in consumer prices and ongoing declines in factory-gate prices. Investors are shifting to offshore assets, reflecting weak confidence in the domestic market.

China's stock markets experienced downturns on Thursday, with official data revealing ongoing deflationary pressures. Despite new governmental consumption stimulus efforts, the economic climate remains challenging, prompting investors to seek offshore assets.

The blue-chip CSI300 Index in China fell by 0.3%, the Shanghai Composite Index by 0.6%, and Hong Kong's Hang Seng by 0.2%. Consumer prices barely rose last year, and factory-gate prices continued their decline, per official data.

In response to sluggish consumer demand, China expanded its trade-in scheme for home appliances. While tech stocks and sectors like defense and rare earths saw gains, domestic investment confidence lags, leading to increased cross-border financial movements.

(With inputs from agencies.)