(NBS) China’s producer prices rose at an annual rate of 10.3% in December, slower than 12.9% the previous month and below the expected 11.1% increase.
The slow increase in producer prices reflected measures taken by the Chinese government to tame prices.
Chief economist at Capital Economics Sheana Yue expects the factory prices to continue falling as the coal supply continues to improve while property construction slows.
China’s consumer prices also slowed to an increase of 1.5% in December from the prior year, better than expected gain of 1.8% and below the 2.3% jump in November. Overall, the CPI gained 0.9% in 2021, from a jump of 2.5% in 2020.
Pinpoint Asset Management chief economist Zhiwei Zhang says lower inflation allows the Chinese government room to loosen monetary policy to stabilize the economy and trim the financing costs.
China still faces headwinds in 2021, including its in-crisis property sector, Covid-19 outbreaks, and slowing manufacturing sector.
CSI 300 is up +1.00%.
