China's consumer price index (CPI), a major gauge of inflation, dipped 1.2 percent in August from a year earlier.

The rate of decline was 0.6 percentage points lower than that in July. In August 2008, the CPI rose 4.9 percent over the same month in 2007.

This marked the seventh consecutive month of decline since the index dropped 1.6 percent in February, the first fall since October 2002.

The producer price index (PPI), a major measurement of inflation in wholesaling, in August fell 7.9 percent from a year earlier.

The rate of decline was 0.3 percentage points lower than that in July. In August 2008, the PPI rose 10.1 percent over the same month in 2007.