China’s consumer price index showed inflation slowing to 1.2% in May due to a sharp drop in food costs, down from April’s 1.5% thanks in large part to a drop in pork prices–though the country’s producer price index held steady at -4.6%, indicating that a decline in Chinese factories’ pricing power continues unabated, Reuters reported, citing data from the National Bureau of Statistics. “We are basically in the midst of a balance sheet recession with Chinese characteristics,” said Andrew Polk, economist at the Conference Board. “Companies and banks are busy repairing their balance sheets, and that suppresses borrowing appetite.”