Data released on Monday showed that China's consumer price index measure of inflation eased to 1.9pc in September, down from 2pc in August, while producer prices dropped 3.6pc from a year earlier, both in line with economist's forecasts.
Subdued consumer prices, signs that lending is finally perking up and the approaching end to the destocking cycle, along with stable employment, could allow policymakers to argue that steps taken in the past year have worked.
Last November China eased its monetary policy for the first time in three years, reducing the required reserve ratio for all banks by 0.5 percentage points, starting from December 5.
The falling figures will give officials room to breath as the once-a-decade leadership change approaches, allowing the new generation of leaders to take further steps to stimulate growth.
GDP data out on Thursday is expected to show that growth in the world's second largest economy has slowed for the seventh consecutive quarter.
The Chinese economy remains one of the fastest growing major emerging countries, however, growth has started slow and the official forecast for growth in 2012 is 7.5pc, down from growth of 9.2pc seen in 2011.