(Oct 15): China’s factory-gate prices fell in September for a record-tying 31st month while consumer inflation eased to the slowest since January 2010, adding to signs of tepid demand in the world’s second-largest economy.

The producer-price index dropped 1.8 percent from a year earlier, the National Bureau of Statistics said in Beijing today, compared with the median projection of a 1.6 percent decline in a survey of analysts by Bloomberg News. The consumer- price index rose 1.6 percent, below estimates for a 1.7 percent gain, after August’s 2 percent increase.

The drop in producer prices matches a streak from 1997 to 1999, when a financial crisis roiled Asia. Now a property slump in China is pushing down the nation’s annual growth to what analysts project is the slowest pace since 1990, and People’s Bank of China Governor Zhou Xiaochuan said this month that inflation will probably “stay mild.”

“Overcapacity is still plaguing the domestic market, and the weak property sector is dragging industrial demand even lower,” Zhou Hao, a China economist at Australia & New Zealand Banking Group Ltd. in Shanghai, said before today’s data release.

Consumer inflation remains well below the government’s target for about 3.5 percent this year. Analysts’ estimates for the September CPI gain ranged from 1.4 percent to 2.1 percent. Projections for the decline in producer prices ranged from 0.7 percent to 1.9 percent, following a 1.2 percent fall in August.

Premier Li Keqiang reiterated this month that China won’t have a hard landing.

Policy Easing

China’s central bank cut the interest rate it pays lenders for 14-day repurchase agreements for the second time in a month yesterday, a sign of monetary easing aimed at reducing borrowing costs.

Trade numbers released earlier this week showed exports rose more than estimated from a year earlier and imports unexpectedly rebounded. Analysts at banks including Everbright Securities Co., ANZ and Bank of Communications Co. said over- invoicing and over-reporting may explain part of the export surge.

The statistics bureau is scheduled to publish its third- quarter gross domestic product report on Oct. 21, along with September industrial production and retail sales and January- September fixed-asset investment.