China's got a deflation dilemma.

Hello, and you're listening to the Marketplace Morning Report live from the BBC World

Service.

I'm Liana Bern.

Very good morning to you, and thanks for joining us.

Chinese economy is facing a new challenge deflation.

Consumer prices there have taken a dip the first time since early 2021.

They're down three tenths of a percent last month compared to the year before, and the

producer price index, and that's the cost of goods, bought and sold by manufacturers,

that took an even bigger dive than 4.4 percent in July.

Here's the BBC's China Correspondent, Steve McDonnell.

The next solution is for now.

The bustling scene on Beijing's vast underground train network is exactly what you'd expect for

a modern city of more than 20 million people.

At times during the COVID crisis, it was strangely quiet, though, with many working

from home or choosing to stay indoors, but these days, it's as if COVID never happened.

For face value, this would seem to show an economy rebounding strongly.

Well, analysts are telling us that's not actually the case.

The crowded walkways leading from stations to shopping centres belive the fact that

consumer spending, especially on big ticket items, has been quite weak here.

People are nervous about job security or about the value of their homes, so they're saving

more.

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