Stock prices in China experienced a notable increase on Monday, as investors reacted positively to government indications of renewed efforts to address economic weaknesses through increased borrowing and reduced oversight of the private sector. The CSI 300 index, which tracks large companies listed in Shanghai and Shenzhen, rose by 1.9 percent. This uptick occurred despite a discouraging economic report released the previous day, which revealed that prices charged by factories and other producers had declined by 2.8 percent in September compared to the same month last year. This marks two consecutive years of year-on-year declines in monthly wholesale prices. Consumer price index data showed a modest increase of only 0.4 percent, falling short of expectations, with prices for goods excluding food also declining. Persistently low prices pose a significant challenge for China's economy, indicating deflation and complicating the ability of indebted companies and households to generate sufficient income to service their loans. Finance Minister Lan Fo’an announced on Saturday that the government plans to increase borrowing to assist cash-strapped localities, stabilize the real estate market, and enhance funding for state-owned banks. This announcement is part of a broader series of recent measures aimed at acknowledging and addressing the economic struggles faced by both the economy and the private sector. While Mr. Lan did not specify the extent of the additional borrowing or spending, Luo Wen, the director of the State Administration for Market Regulation, assured at a Monday briefing that the government would refrain from imposing unreasonable fines on businesses. He emphasized the government's commitment to treating the private economy equitably and fostering a conducive environment for its development. Consumer confidence in China has significantly declined over the past few years, failing to recover from the sharp drops experienced during the Covid-19 pandemic, with housing sales also witnessing a downward trend for the past two years. In response, the central bank and financial regulators announced measures to stimulate bank lending on September 24, including interest rate reductions. Following this, the ruling Communist Party's Politburo called for immediate actions to stabilize the economy, resulting in a more than 20 percent rise in the CSI 300 index since the initial measures were introduced. It is important to note that while the Communist Party holds absolute power, any overall increase in government spending beyond previously approved amounts requires approval from the standing committee of the national legislature, which is not expected to convene again until late this month.