China enters deflation; inflation at -1.6% in Feb 2009

China`s consumer price index, its main inflation benchmark, fell to (-) 1.6% in February, the National Statistics Bureau reported on Tuesday.
The decline was led by 1.9% fall in food prices. It is the first time since December 2002 the index has slipped into negative.
For the same period last year, i.e. in February 2008, the inflation was at its 12-year peak of 8.7%, amid shortages of grain and pork. The 1.6% decline in consumer prices compares with a 1% increase in January 2009.
The statistics bureau said that the producer price index, another key price indicator, fell 4.5% in February compared with a 3.3% decline in January.

Source: IRIS International (10 March 2009)