Downward pressure in the world's second-largest economy persisted in September, when consumer and production prices declined by 0.3% and 2.3%, respectively, compared with last year.

Calls for Beijing to intervene with political measures to stop price declines have intensified, and the government has responded by introducing steps to limit competition.

Among them is the promise of Chinese leaders to stop aggressive price cuts by some domestic companies, which, according to regulators, is putting pressure on an already slowing multi—trillion economy.

Beijing's campaign to reduce production and consolidate industries in order to stop the sharp decline in prices, partly due to the need for Chinese companies to sell off stocks and attract customers, has been called "anti-revolution." This term refers to countering "involution" — intense, continuous competition that can cause overexertion without any meaningful benefits or progress.

However, as BCA Research analysts note in a note to clients, they do not expect these policies to "put an end to deflation [...] over the next year or so."

"The Chinese authorities will be reluctant to reduce production capacity, as this strategy will lead to layoffs," they argue. "Consequently, production will continue to exceed demand, and price deflation will persist."