Inflation Eases

China’s consumer inflation eased sharply in February after price distortions created by the festival season faded, leaving the central bank with leeway on interest rate policy.

The consumer price index (CPI), a main gauge of inflation, advanced 0.8 percent year on year in February, the National Bureau of Statistics (NBS) said on March 9.

It was well below market expectation of 1.7 percent, and substantially lower than the growth of 2.5 percent in January. On a monthly basis, the CPI declined 0.2 percent.

The NBS attributed the weakening CPI to sharply lowering food prices, which fell 4.3 percent in February. Food prices surged 27 percent in January driven by the festival shopping spree.

“As the travel season has ended, the number of tourists declined in February, bringing down the costs of tourist services, which partly explains the lower CPI,” the NBS said.

China’s producer price index (PPI), which measures costs of goods at the factory gate, rose 7.8 percent year on year in February, increasing from 6.9 percent in January.

The PPI hit its highest level since 2008, largely as a result of government measures to trim excessive industrial capacity. The index is likely to fall as capacity reduction continues.

This is Boeing’s first overseas facility as part of its 737 production system, and it is designed to deliver 100 Boeing 737 planes per year.

In the joint-venture completion center, Boeing’s 737 aircraft will be installed with flight entertainment systems and seats. The plant in Zhoushan, 287 km southeast of Shanghai, also provides services such as coating, repair and maintenance of Boeing aircraft.

Boeing and COMAC signed an agreement in October 2016 to set up the Zhoushan plant, which will consist of two parts: the 737 completion center, and the 737 delivery center owned by Boeing.

To accommodate aircraft manufacturing in Zhoushan, the city’s Putuoshan Airport is undergoing a 750-million-yuan ($108 million) expansion to become an international airport.

In addition to supporting Boeing, the aviation base in Zhoushan will also develop an entire industrial chain for aircraft manufacturing, with the capacity to assemble, deliver and modify 600 aircraft per year by 2025.

Zhoushan is an archipelago and island city, which has the largest fishery in China and boasts strong shipbuilding, tourism and service industries.