China Factory Deflation Eases But Not Enough to Call Turnaround

China’s factory deflation eased for the first time in six months even as consumer prices slipped below zero again, leaving open the question of whether the government will make a lasting difference with its campaign to ease overcapacity across the economy.

The producer-price index decreased 2.9% in August from a year earlier, the National Bureau of Statistics said Wednesday, remaining in negative territory for the 35th straight month but narrowing its decline from July’s 3.6% drop.

In month-on-month terms, output prices in some upstream sectors such as the mining and processing of metals rose for the first time in months. ...