{"id":121112,"date":"2021-09-09T04:28:43","date_gmt":"2021-09-09T04:28:43","guid":{"rendered":"https:\/\/fin2me.com\/?p=121112"},"modified":"2021-09-09T04:28:43","modified_gmt":"2021-09-09T04:28:43","slug":"chinas-factory-inflation-hits-13-year-high-as-materials-costs-soar","status":"publish","type":"post","link":"https:\/\/fin2me.com\/business\/chinas-factory-inflation-hits-13-year-high-as-materials-costs-soar\/","title":{"rendered":"China's factory inflation hits 13-year high as materials costs soar"},"content":{"rendered":"

BEIJING (Reuters) -China\u2019s factory gate inflation hit a 13-year high in August driven by roaring raw materials prices despite Beijing\u2019s attempts to cool them, putting more pressure on manufacturers in the world\u2019s second-largest economy.<\/p>

FILE PHOTO: Employees work on the production line of American infant product and toy manufacturer Kids II Inc. at a factory in Jiujiang, Jiangxi province, China June 22, 2021. Picture taken June 22, 2021. REUTERS\/Gabriel Crossley<\/figcaption>

The producer price index (PPI) rose 9.5% from a year earlier in August, the National Bureau of Statistics (NBS) said on Thursday, faster than the 9.0% increase tipped in a Reuters poll and the 9.0% reported in July. That was the fastest pace since August 2008.<\/p>\n

China\u2019s economy has recovered strongly from last year\u2019s coronavirus slump but has been losing steam recently due to domestic COVID-19 outbreaks, high raw material prices, tighter property curbs and a campaign to reduce carbon emissions.<\/p>\n

Commodity prices have been on a tear in recent months, hurting the bottom lines of many mid- and downstream factories. China\u2019s coal prices soared to a record high on Tuesday over supply concerns as major coal regions started fresh rounds of safety checks.<\/p>\n

Earnings at China\u2019s industrial firms have slowed for five straight months.<\/p>\n

But coal and metals prices will likely drop back as construction activity falls amid restrictions on the property sector and slowing credit growth, Julian Evans-Pritchard, senior China economist at Capital Economics, wrote in a note.<\/p>\n

And the higher comparison base towards the end of last year will also pull down overall inflation. \u201cWe doubt producer price inflation will rise much further,\u201d he said.<\/p>\n

The coal, chemicals and metals industries drove much of the price increases in August, according to a statement released alongside the data by Dong Lijuan, an NBS official.<\/p>\n

Prices in the coal mining and washing sector grew 57.1% in August from a year earlier.<\/p>\n

A separate NBS statement showed that the consumer price index (CPI) in August rose 0.8% from a year earlier, compared with a 1.0% gain in a Reuters poll and below the government target of around 3% this year.<\/p>\n

China tightened social restrictions to curb the COVID-19 Delta variant including travel limits, which have hampered service-sector demand, although Beijing has largely contained the latest coronavirus outbreaks.<\/p>\n

Declines in airfares, travel and hotel room prices due to the pandemic slowed consumer inflation on a monthly basis, according to NBS\u2019s Dong.<\/p>\n

Service-sector activity plunged in August to the lowest level since the pandemic\u2019s first wave in April 2020, a recent survey showed, as COVID-19 restrictions threatened to derail the recovery.<\/p>\n

Many analysts expect the People\u2019s Bank of China to deliver a further cut to the amount of cash banks must hold as reserves later this year to lift growth, on top of July\u2019s cut, which released around 1 trillion yuan ($6.47 trillion) in long-term liquidity into the economy.<\/p>\n

\u201cWe expect monetary policy to remain prudent with a slightly loosening bias for the rest of the year,\u201d said Jing Liu, senior economist for Greater China at HSBC, in a note.<\/p>\n

China\u2019s consumer price inflation, which is likely to stay muted, will not constrain a slight loosening stance, she added.<\/p>\n

The core consumer price index, which strips out volatile food and energy prices, stood at 1.2% on year, versus a 1.3% rise in July.<\/p>\n

Source: Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

BEIJING (Reuters) -China\u2019s factory gate inflation hit a 13-year high in August driven by roaring raw materials prices despite Beijing\u2019s attempts to cool them, putting […]<\/p>\n","protected":false},"author":3,"featured_media":121111,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"yoast_head":"\nChina's factory inflation hits 13-year high as materials costs soar - Fin2me<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fin2me.com\/business\/chinas-factory-inflation-hits-13-year-high-as-materials-costs-soar\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"China's factory inflation hits 13-year high as materials costs soar - Fin2me\" \/>\n<meta property=\"og:description\" content=\"BEIJING (Reuters) -China\u2019s factory gate inflation hit a 13-year high in August driven by roaring raw materials prices despite Beijing\u2019s attempts to cool them, putting [...]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/fin2me.com\/business\/chinas-factory-inflation-hits-13-year-high-as-materials-costs-soar\/\" \/>\n<meta property=\"og:site_name\" content=\"Fin2me\" \/>\n<meta property=\"article:published_time\" content=\"2021-09-09T04:28:43+00:00\" \/>\n<meta name=\"author\" content=\"Mark\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:image\" content=\"https:\/\/fin2me.com\/wp-content\/uploads\/2021\/09\/Chinas-factory-inflation-hits-13-year-high-as-materials-costs-soar.jpg\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Mark\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/fin2me.com\/business\/chinas-factory-inflation-hits-13-year-high-as-materials-costs-soar\/\",\"url\":\"https:\/\/fin2me.com\/business\/chinas-factory-inflation-hits-13-year-high-as-materials-costs-soar\/\",\"name\":\"China's factory inflation hits 13-year high as materials costs soar - 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