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China consumer price inflation for August near one-year low

China's August consumer prices rose at their slowest annual pace since October 2015, Reuters reported Friday, citing official statistics.

Consumer price inflation (CPI) climbed an annual 1.3 percent, slower than the estimated 1.7 percent rise and July's 1.8 percent spike.

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Producer prices meanwhile slipped 0.8 percent on-year, better than Reuters' forecasted 0.9 percent fall and significantly narrowing from July's 1.7 percent drop. Higher commodity prices were believed to be the catalyst for the monthly improvement.

Fading producer price deflation points to stronger Chinese nominal growth, noted Shane Oliver, head of investment strategy and chief economist at AMP Capital.

Despite the slowdown in CPI, economists were still optimistic.

"The overall picture for China is still quite positive," Hao Zhu, senior emerging markets economist Asia at Commerzbank, told CNBC's "Squawk Box."

"Narrowing producer price deflation suggests corporate earnings will be improving in the coming months. While CPI is still soft, it at least gives the government and the central bank more room to ease."

Whether or not the People's Bank of China (PBOC) will stimulate further is hotly debated, but major banks including JP Morgan and HSBC widely anticipate fiscal policy to remain accommodative until year-end.

"China's State Council (or cabinet) indicated it would step up fiscal stimulus and investment in weak areas of the economy, adding to confidence that Chinese growth is not about to fall out of bed any time soon," echoed Oliver.

Friday's report closes out a week of China-centric data releases.

August trade data on Thursday surprised markets on the upside thanks to an impressive recovery in imports, adding to optimism about the world's second-largest economy.

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