China's producer price index (PPI), which measures inflation at wholesale level, dropped 0.9 percent year on year in July, the National Bureau of Statistics said on Saturday.
The PPI has now dropped for 29 months in a row, but the pace of decline has narrowed for four consecutive months, down from 1.1 percent in June, 1.4 percent in May, 2 percent in April and 2.3 percent in March.
The narrowing shows that market situations for industrial products slightly improved in recent months, said NBS senior statistician Yu Qiumei.
Factory prices of production materials declined 1.2 percent in July, contributing 0.92 percentage points to the PPI drop, while factory prices for consumer goods gained 0.3 percent, pushing up the PPI a little.
In the first seven months, the country's PPI dropped by 1.6 percent year on year, the data showed.
In the latter half, the PPI may reverse the declining trend due to a carryover effect and the country's pro-growth measures since the beginning of this year, said Guan Qingyou, senior analyst at Minsheng Securities' research institute.
Faced with great downward pressure, the government has adopted a raft of pro-growth measures, including stepping up construction of affordable housing, infrastructure building and encouraging private investment.
The data came along with the release of the consumer price inflation index, which stayed at 2.3 percent in July.