China's producer deflation deepened to its worst level in almost two years in June as the economy grappled with uncertainty over a global trade war and subdued demand at home, piling pressure on policymakers to roll out more support measures.

Rare earths at a factory in Tianjin, China. Manufacturers speak of resilience yet some keep only a week’s supply of rare earth magnets in their inventories © Doug Kanter/Bloomberg China’s weaponisatio

After years of mounting concern over deflation and the bruising price wars that have plagued much of China’s economy, President Xi Jinping’s government is showing signs of finally taking action.