Can China engineer a price recovery that doesn’t make people feel poorer?

AI Summary

China's economy might be on the verge of a turnaround as the latest producer price index indicates a potential end to a long period of deflation. However, concerns remain about how this recovery could affect household perceptions of wealth and overall consumer spending, which have been subdued due to previous economic conditions.

China may finally have a chance to loosen the grip of deflation. Yet, the more important question is whether it can do so without making households feel poorer first. The latest producer price index (PPI), which measures the prices factories charge, brings that possibility back into serious debate. China’s March PPI rose by 0.5 per cent year on year, ending 41 months of decline; it was up 1 per cent from February. After years of weak prices, cautious household spending and squeezed corporate...