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Chinese producer prices rise at the fastest pace in 2013

The prices of products shipped from factories in China are rising at the fastest pace since the financial crisis, putting pressure on policy makers to address the impact of rising global commodity prices.

China’s producer price index rose 9% in May. Data from the National Bureau of Statistics was the largest year-on-year increase since September 2008, exceeding economists’ expectations.

The index has risen sharply in recent months — 6.8% increase April — Due to the international backlash in the commodity market and the low base effect after most of last year was in the negative territory.

China’s consumer price index remains low, but soaring producer prices in China will increase costs for businesses and exporters when they rise. Inflation concerns In the United States and around the world.

“Everywhere, especially in China, rising costs will intensify global inflationary pressures,” said Dariush Kowartik, an economist at Crédit Agricole. “While inflation is rising globally, I think it’s partly because of what’s happening in China.”

China’s PPI is boosted by the commodities and raw materials that form the core of the index. According to NBS data, prices in the iron and metal smelting industry rose 38% year-on-year, and prices in the coal mining industry rose 30%.

Chinese Strong industrial recoveryIt pushed up record levels of steel production, but spurred a sharp rise in commodity prices, supported by global economic recovery and expectations of US stimulus package. But rising prices are beginning to warn Chinese policymakers.

The Chinese government’s Economic Planning Agency warned last month: “Excessive speculation” Commodity markets said they would crack down on monopoly and false information. Iron ore, in May Highest level So far, I stumbled upon the news.

At a meeting of the State Council last month, chaired by Chinese Prime Minister Li Keqiang, he emphasized the need to prevent a spillover to consumer prices. Stay low, And has been driven by fluctuations in pork prices over the past year.Economists have a high cost instead Squeeze the rate of return For businesses, especially those that sell directly to consumers.

According to NBS, consumer prices in China rose 1.3% in May, the highest since September, but fell 0.2% month-on-month.Pork price Soared In recent years, culling by African swine fever has become widespread, down 24% year-on-year.

China lowered interest rates last year and began to cut interest rates gradually, but has left it unchanged. Tightening credit conditionsMizuho’s Chief Asian FX Strategist Ken Chang said the flow from PPI to CPI is “relatively gentle and gradual” and that the People’s Bank of China should not rush to tighten interest rate cycles domestically. It was.

However, he suggested that “given China’s important share of world trade, a surge in PPIs could contribute to global inflationary pressure.”

Delay at the port There is also growing concern about rising Chinese export prices in southern China as a result of the outbreak of Covid-19. It has benefited from high demand in the United States and Europe over the past year. More than 100 cases have been reported in Guangdong since late May, and the government is taking swift action.

The Chinese currency has been steadily rising over the past year, and recently High price for the first time in 3 years Against the dollar. Luis Quiss, head of the Asian economics sector at Oxford Economics, said last week that the strength of the yuan means that machine production prices are rising on a dollar basis.

“China is clearly not exporting inflation in its own currency, but from a US perspective, rising import prices from China could begin to be noticed in the inflation debate there.” He said.

Chinese producer prices rise at the fastest pace in 2013

Source link Chinese producer prices rise at the fastest pace in 2013

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