That was lower than analysts’ forecasts of 1.8%, and down from the rate of 2% recorded in August 2015.
Producer prices fell for a 43rd straight month as manufacturers cut prices to win business.
The latest inflation figures added to fears of a rapid slowdown in China, the world’s second largest economy.
Asian markets were all lower in response to the inflation figures, which came a day after data that showed imports fell for an 11th straight month in September.
China’s producer price index (PPI) fell 5.9% in September 2015 from a year earlier, matching the rate of decline in August, which marked the biggest fall since the financial crisis.
Non-food consumer inflation was even lower with an annual growth rate of just 1% in September, the NBS data showed.
The easing CPI was mainly due to a high comparison base last year, Yu Qiumei, a senior NBS statistician, said.
CPI rose 0.5% month-on-month in September 2014, compared to a 0.1% growth last month.
Reflecting growing strains on Chinese companies from persistently weak demand and overcapacity, manufacturers continued to cut selling prices to win business.
China has already launched a wave of economic stimulus measures since late 2014, including cutting benchmark interest rates five times since November, but some analysts believe the moves have been less effective than when the economy was more tightly controlled, exports were strong and debt levels were much lower.
Weak producer prices are also threatening to erode the profits of Chinese companies and add to their debts, something analysts expect to continue for the remainder of the year.
The inflation figures come as trade data on October 13 showed imports tumbled for the 11th month in a row in September, as result of weaker global commodity prices and lower demand. Exports also fell for a third month, although by less than expected.
Other surveys showed activity in China’s factory sector shrank in September on fewer new orders, sparking fears the Chinese economy may be slowing down more rapidly than expected.
China will release gross domestic product (GDP) data for Q3 of 2015 on October 19. Many economists expect the three months to September to show economic growth fell below the government’s target of 7% for the first time since the financial crisis.
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