Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - China's headline CPI inflation increased to +0.1% year-over-year (yoy) in June from -0.1% yoy in May, driven by rising non-food goods prices [1][4] - Headline PPI inflation fell to -3.6% yoy in June from -3.3% yoy in May, primarily due to declining commodity prices, indicating deeper deflationary pressures [1][10] - The full-year PPI inflation forecasts for 2025 and 2026 have been revised down to -2.8% and -1.0% yoy respectively, reflecting weaker-than-expected PPI data [1][11] Summary by Sections Consumer Price Index (CPI) - CPI rose to +0.1% yoy in June from -0.1% yoy in May, with a month-on-month (mom) annualized increase of +1.9% [2][4] - Food inflation slightly improved to -0.3% yoy in June from -0.4% yoy in May, with pork prices falling by 8.5% yoy [5][8] - Non-food CPI inflation increased to +0.1% yoy in June from 0.0% yoy in May, with household item prices rising by 0.6% yoy [6][9] Producer Price Index (PPI) - PPI inflation decreased to -3.6% yoy in June from -3.3% yoy in May, with significant declines in upstream sector prices [10][11] - The NBS attributed the deeper PPI deflation to falling export prices and seasonal declines in raw materials [10] - PPI inflation for producer goods fell to -4.4% yoy in June, while consumer goods remained flat at -1.4% yoy [10] Trade Data Forecast - The report anticipates a 6.0% yoy increase in exports for June, up from 4.8% yoy in May, and a 2.0% yoy rise in imports, contrasting with a decline of -3.4% yoy in May [12]