Some Chinese ADRs dropped in premarket trading on Wednesday as China’s deflationary trend became more entrenched, deepening concerns about the nation’s growth prospects.

YINN, Alibaba fell 3%; Bilibili, JD.com fell 2%; Baidu, PDD Holdings, XPeng fell 1%.

Producer prices on the mainland dropped by 3.6 per cent from a year earlier in June, marking the 33rd straight month of declines and the steepest drop in more than two years, the National Bureau of Statistics said on Wednesday. Consumer prices unexpectedly rose by 0.1 per cent.

Falling prices were believed by investors to be the biggest risk to China’s economy and the stock market, with the woes in the property market deterring homebuyers and industrial overcapacity hampering investments. Investors awaited more policy signals from a Politburo meeting later this month after top leaders pledged to address “involution”, a term coined to describe irrational competition in some industries plagued by excessive supply.

“The momentum in the property sector is still weakening,” said Zhang Zhiwei, chief economist at Pinpoint Asset Management in Hong Kong. “The ‘anti-involution’ campaign is still at its early phase. It is unclear what measures will be launched to prevent firms from over-competition in a weak demand environment.”