China should be alert at the dropping Producer Price Index (PPI), an indicator that measures the average changes in prices received by domestic producers for their output, China's vice-finance minister said on Thursday.

“China's PPI in the first half of this year has declined by 2.2 percent and this marks the 16th consecutive monthly decline. It suggests that our manufacturing and real economy are facing severe difficulties,” Vice-Finance Minister Zhu Guangyao said in a speech at the Global CFO Leadership Summit, which was co-hosted by finance training provider Golden Finance and Shanghai University of Finance and Economics.

China's June PPI declined by 2.7 percent, according to data released by the National Bureau of Statistics on Monday.

Zhu added that China's macroeconomic adjusting policy should consider a batch of economic indicators — not only the GDP growth rate, CPI level and unemployment, but also PPI.

His comments came two days after Premier Li Keqiang said China's economy should be maintained above the “upper limit”, which is measured by the GDP growth and employment, and under the “lower limit”, which is measured by CPI growth.

Referring to June's interbank lending turbulence, he said China's macroeconomic policy should be extremely careful. It should avoid sudden fluctuations that would have a negative impact on the market.

He also spent a lengthy time on discussions of US' quantitative easing policy, saying the withdrawal problem had added many uncertainties to China's external economic environment.