Unsurprisingly, this has exacerbated the fear of deflation, with the consumer price index (CPI) rising by just 0.8% year on year in January, and the annual decline in producer prices steepening, to 4.3%. While these trends are undoubtedly being amplified by plummeting world oil prices, China's core CPI inflation rate (which excludes volatile food and energy prices) was near 1% in January.