Chinese producer price index rose 1.7% in February from a year earlier and 0.3% from January, beating the forecasted 1.5%. According to Bloomberg, the rise in China’s producer prices raises the global inflation risks as factories hike prices for goods sold abroad.
China’s rise in producer prices in February is the fastest pace in more than two years.
Rising commodity prices were the main boost to China’s producer inflation in February.
Excluding volatile energy and food costs, consumer prices were unchanged from a year earlier.
The rise in China’s producer prices adds to the already existing concerns that the massive fiscal stimulus in the U.S will push up inflation.
Chinese producer prices have been a major contributor to global inflation in recent decades as supply chains became more integrated.
Surging oil, copper, and agricultural prices, soaring shipping rates, and a global shortage of computer chips could also push up prices.
Chinese government’s conservative economic growth target of more than 6% this year and gradual withdrawal of stimulus is expected to play a lesser role in driving demand for commodities.
Chinese stocks are currently gaining as the Yuan loses. CSI 300 Index is up 0.66%, USDCNY is up 0.09%
