China's producer price index (PPI), which measures wholesale inflation, fell 1.9 percent year on year in March, the National Bureau of Statistics said on Tuesday.
The drop, the 13th straight month of decline, widened from the 1.6-percent annual fall seen in February, suggesting continued weak market demand.
Month on month, producer prices in March remained unchanged following a 0.2-percent rise logged in both January and February, a sign of muted inflationary pressure at the factory gates.
Output prices of production materials fell 2.7 percent in March, contributing two percentage points of the PPI drop in the month, while those of consumer goods gained 0.5 percent during the period.
The data came along with the release of the consumer price inflation index, which eased from February's 10-month high of 3.2 percent to 2.1 percent due to lower food prices.
Wang Jun, an economist with the China Center for International Economic Exchanges, said the mild inflation laid a good foundation for achieving the year's inflation control target of 3.5 percent.