The cost of making goods is rising, but Chinese consumers are still spending cautiously.
It's World Business Express from the BBC World Service.
I'm Bissi Adebayo.
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and Volkswagen considers what could be the biggest restructuring in its history.
So China's factory gate prices, the prices manufacturers receive for their goods before they reach the shops,
rose sharply in June as conflict in the Middle East pushed up energy costs.
But with Chinese shoppers still spending cautiously, price rises haven't hit consumers just yet.
I can speak into Ginny Yan, Chief China Economist at ICBC Standard Bank in London.
There's not a huge amount of income growth.
So when we compare with maybe Chinese consumers, with US consumers,
the difference there is that the incremental growth in terms of take home pay or income growth.
Is not strong enough to justify spending a little bit more consistently or with a little bit more conviction.
One of the reasons for that is that obviously with China's growth still very much supported by the new economy,
and by that I mean the tech sector, AI.
That is not yet filtered down to everyday take home pay.
And why is that?
Because really you say this is a tech boom.
There's a huge demand for AI, the semiconductor industry as well.
A little bit different, again, to Western peers, where tech industry tends to be private sector driven.