Chinese factories are losing pricing power in the worstwholesale-cost deflation since 2009, signaling corporate earningsmay deteriorate further and putting a damper on global inflationpressures.

Steelmaker China Oriental Group Co. says falling prices arewiping out profits, while Yunnan Copper Industry Co. cited thedeclines for a third-quarter loss. The producer-price index fell3.6 percent in September from a year earlier and may stay negativeuntil the second half of 2013 without large stimulus, according toMizuho Securities Asia Ltd.

With the U.S. reporting the longest stretch in three years thatChinese imports have gone without a price increase, the trend alsogives policy makers around the world more room for easing tosupport faltering global growth. Sluggish earnings growth mayprompt the government to reduce corporate taxes to aid earnings andhelp boost spending after China's expansion slowed for a seventhquarter.