In February, China's consumer inflation fell below zero for the first time in 13 months, with the Consumer Price Index (CPI) contracting by 0.7% year-on-year. This decline exceeded expectations of a 0.4% drop and reversed January's slight increase of 0.5%, highlighting ongoing disinflationary pressures within the economy.

The CPI also decreased by 0.2% month-on-month, surpassing forecasts of a 0.1% decline. This persistent contraction indicates a significant downturn in consumer spending, which has been a major contributor to deflation in China over the past two years. Despite recent initiatives from Beijing aimed at boosting private consumption through subsidies on discretionary goods, these efforts have yielded limited results.

Additionally, the Producer Price Index (PPI) shrank by 2.2% year-on-year, slightly better than January's 2.3% contraction but still missing expectations of a 2% decline. This marks the 29th consecutive month of PPI deflation, reflecting weak local demand.

The inflation data underscores the urgent need for further economic stimulus from Beijing, particularly as trade tensions with the U.S. escalate following President Trump's recent imposition of tariffs. Chinese officials have indicated plans to enhance fiscal spending and support private consumption in the coming months, although specific measures have yet to be detailed.