China's Deflationary Threat Spurs Demands for Interest Rate Cuts

China’s inflation remained close to zero in May as the economy’s recovery weakened, giving the central bank scope to ease monetary policy to spur growth.

The consumer price index rose 0.2% from a year earlier, the National Bureau of Statistics said Friday, in line with forecasts and up from 0.1% in April. Producer prices declined 4.6% on the back of lower commodity prices and weak domestic and foreign demand. Economists had expected a 4.3% decrease.

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