China's key inflation gauge stabilized in October but remained at its slowest rate in five years, fresh data showed on Monday, adding to evidence the world's second-largest economy is cooling.
The consumer price index (CPI) rose 1.6 percent from the year-ago period, in line with a Reuters forecast and unchanged from September.
Prices stayed flat on a monthly basis, compared with a 0.1 percent gain forecast and after rising 0.5 percent in the previous month.
The wholesale sector, meanwhile, stayed entrenched in a deflationary spiral – the producer price index (PPI) fell 2.2 percent on year in October, worse than the 2 percent decline forecast and following the drop of 1.8 percent the month before. On-month, PPI fell 0.4 percent
"The [inflation] numbers have been heading downwards, starting pretty strongly into September and October is a continuation of that," said Steve Wang, Chief China Economist at Reorient Financial Markets.
"This is another signal that the over-capacity issue within China is coming back so there's really no time left. We believe the government should step on the rate cut and go forward with further structural reforms," he added.