China's factory-gate prices fell 2.7 percent in April, the steepest drop in six months, while consumer prices fell for the third consecutive month, underscoring mounting deflation risks.

The economic downturn is being driven by low domestic demand, a prolonged housing collapse, and escalating trade tensions with the United States, according to Reuters.

In response, Beijing has announced more stimulus measures, like as rate reduction and liquidity increases. Retail giants such as JD.com and Alibaba's Freshippo are assisting exporters in shifting to the domestic market, however low consumer confidence may keep prices under pressure.

As trade talks start in Switzerland, global banks have downgraded China's GDP forecast to below the official 5 percent target, citing the impact of ongoing economic headwinds, Reuters reported.