In July, China's factory-gate prices rose at their slowest pace in three months, a signal that the world's second-largest economy is navigating a quiet but consequential tension: its industrial engine keeps turning, yet the domestic hearth grows cold. The producer price index climbed 3.5% year-over-year — softer than economists expected and down from June's 4.1% — as easing energy costs and cautious Chinese households together dampened price pressures. This divergence between export strength and internal weakness is an old story in new clothing, and Beijing's response — accelerating fiscal spe