Today, China's CPI data was released: 0.7%, below the expected 0.8% and the previous value of 0.9%! The most alarming figure isn't the CPI of 0.7%, but rather the PPI, which has now surged to 5.7%, yet downstream consumers remain unresponsive. This means that upstream costs are rising, while consumption remains stagnant, leaving businesses caught in the middle, continuing their internal competition and price wars. The only positive factor is that the GDP deflator has finally turned positive. As shown in the chart below (marked by green bars), the Chinese economy has experienced several periods of negative GDP deflators, such as the seven quarters of 1998-1999, the two quarters of 2009, and the two quarters of 2015-2016. The recent 12-quarter negative nominal deflationary index from 2023 to early 2026, marking the end of a three-year period of nominal contraction, indicates that China is gradually emerging from the risk of deflation, with economic recovery already evident in corporate revenues. Some upstream energy and raw material companies may benefit first and are worth watching! This article is sponsored by @binancezh, "Binance US Stocks: Global Assets, Zero Time Difference, One-Click Access!"