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China's annual consumer inflation rate rose 2.6 percent in August, official data showed on Monday, in line with market expectations and little changed from the previous month's 2.7 percent rise.
The National Bureau of Statistics also said that China's producer prices fell 1.6 percent last month from a year earlier, compared with a fall of 2.3 percent in the previous month.
Economists polled by Reuters had expected consumer inflation of 2.6 percent and factory-gate prices to fall 1.8 percent.
Month-on-month, consumer prices were up 0.5 percent versus a rise of 0.4 percent expected by economists.
China shares extended gains after the positive data which added to optimism following solid trade data over the weekend.
The CSI300 of the leading Shanghai and Shenzhen A-share listings was up 2.1 percent at 2,408.1 points. The Shanghai Composite Index gained 1.9 percent. Both are now at their highest intra-day levels since mid-August.