Mea­sure of China’s in­fla­tion slows for fourth straight month in Oc­to­ber

Iran Daily - - Global Economy -

China’s fac­tory-gate in­fla­tion slowed for the fourth month in Oc­to­ber amid cool­ing do­mes­tic de­mand for raw ma­te­ri­als and ebbing man­u­fac­tur­ing ac­tiv­ity, un­der­scor­ing ris­ing eco­nomic pres­sure in the face of sim­mer­ing trade fric­tions with the United States.

The con­sumer price in­dex (CPI), mean­while, re­mained steady in Oc­to­ber from the pre­vi­ous month with food prices sta­ble, of­fi­cial data from Na­tional Bureau of Statis­tics (NBS) showed on Fri­day, Reuters re­ported.

The pro­ducer price in­dex (PPI), a mea­sure of the prices busi­nesses re­ceive for their goods and ser­vices, rose 3.3 per­cent in Oc­to­ber from a year ear­lier, eas­ing from 3.6 per­cent in Septem­ber, the statis­tics bureau said.

An­a­lysts polled by Reuters had ex­pected the Oc­to­ber pro­ducer price in­fla­tion rate — also used by econ­o­mists as a rough gauge of in­dus­trial profit trends — would ease to 3.3 per­cent. On a month-to-month ba­sis, the PPI in­creased 0.4 per­cent.

Eco­nomic mo­men­tum in China has been soft­en­ing in the past months. Pres­i­dent Xi Jin­ping said last week that the world’s sec­ond-largest econ­omy is fac­ing ‘grow­ing down­ward pres­sure’.

Un­der­ly­ing fac­tory-gate in­fla­tion in re­cent months has been crimped by eas­ing con­sump­tion, with China’s fixedas­set in­vest­ment growth hov­er­ing around record lows and in­dus­trial firms’ prof­its fall­ing since May.

Bei­jing’s clamp-down on fi­nan­cial risks had also slowed credit de­mand some­what, while some mid-sized com­pa­nies have strug­gled to pass on higher prices to con­sumers.

Pri­vate and of­fi­cial fac­tory sur­veys have shown wor­ry­ing months-long down­turn on ex­port or­ders, sug­gest­ing Bei­jing’s in­ten­si­fy­ing trade dis­pute with the US is start­ing to put a strain on busi­nesses.

Gov­ern­ment data on ex­ports, how­ever, has shown re­mark­able strength, likely due to ship­pers rush­ing to beat higher US tar­iffs on Chi­nese goods due to come into ef­fect at the start of next year.

The ris­ing head­winds to growth have prompted Bei­jing to ramp up stim­u­lus mea­sures to spur do­mes­tic de­mand.

China vowed to lower im­port tar­iffs and fur­ther broaden mar­ket ac­cess dur­ing the week-long China In­ter­na­tional Im­port Expo on Mon­day.

Pol­i­cy­mak­ers have also com­mit­ted to boost­ing in­fra­struc­ture in­vest­ment in ‘weak ar­eas’ such as rail­ways, high­ways and air­ports.

Raw ma­te­rial prices in­creased 6.7-per­cent in Oc­to­ber from a year ear­lier, down from a 7.3-per­cent gain in Septem­ber.

The con­sumer price in­dex (CPI) rose 2.5 per­cent in Oc­to­ber from a year ear­lier, same as Septem­ber’s rate and an­a­lysts’ fore­cast. On a monthly ba­sis, the CPI rose 0.2 per­cent. China has set its con­sumer in­fla­tion goal at three per­cent for 2018, same as last year.

The state plan­ner re­cently said there is no sign of ac­cel­er­at­ing con­sumer in­fla­tion and ex­pected prices to re­main within a rea­son­able range.


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