China's Trade and Inflation Trends Highlight Economic Shift

In July 2026, China's inflation cooled more than expected, with factory-gate inflation easing to a three-month low and consumer prices slowing, as reported on August 9, 2026. Meanwhile, trade data for the first half of the year showed that China remained Germany's top trading partner, despite a significant drop in German exports to China. The decline in exports, over 12% in H1, is attributed to China's industrial upgrading, which has reduced its reliance on European industry. This shift has also led to a growing German trade deficit with China. Despite these changes, experts emphasize that cooperation between the two countries remains vital.