China’s inflation rebounded more than forecast to a 10-month high last month, approaching the government’s target as a week-long holiday helped boost prices.
The consumer price index (CPI) rose 3.2 percent last month from a year earlier, the Chinese National Bureau of Statistics said yesterday.
That compares with the 3 percent median estimate in a Bloomberg News survey of 35 economists and a 2 percent gain in January.
Data in the first two months of the year are distorted by the Lunar New Year holiday.
A sustained pickup in inflation would boost the case for monetary tightening after the nation’s new leadership team cements its succession next week at the annual meeting of the National People’s Congress in Beijing.
Outgoing Premier Wen Jiabao (溫家寶) said this week that China is under “considerable inflationary pressure” from land and labor costs and developed countries’ easing.
“Inflation is a policy risk looming large on the horizon,” Liu Li-gang (劉利剛), chief Greater China economist at Australia & New Zealand Banking Group Ltd in Hong Kong, said in a note yesterday.
Rising wages, environmental costs and economic growth will contribute toward higher prices, Liu said.
Producer prices fell 1.6 percent from a year earlier, the 12th straight decline and the same as January’s drop. That compares with the median estimate for a 1.5 percent fall in a Bloomberg survey of 32 economists.
The CPI rose a combined 2.6 percent in January and last month from a year earlier, compared with a 3.9 percent gain in the first two months of last year.
Out of 24 economists surveyed by Bloomberg News last month, 10 forecast an interest-rate increase by the end of the year.
Consumer price gains may moderate this month as the impact of the holiday fades and better weather boosts production of agricultural products including vegetables, the statistics bureau said in a separate statement on its Web site explaining seasonal forces that affected the data.
China set an inflation goal of 3.5 percent for this year, Wen said in his final annual report to the congress on Tuesday, lowering the target from last year’s 4 percent.
Analysts surveyed by Bloomberg expect a pickup to 3.1 percent this year.
The nation may need to raise interest rates should CPI gains stay at more than 3.5 percent for three months, Chen Dongqi (陳東琪), a senior researcher affiliated with China’s top planning agency, said on Thursday.
Consumer inflation will slow to below 2.5 percent this month, then gradually accelerate to “stay consistently above” 3 percent after the middle of this year, said Zhu Haibin (朱海濱), chief China economist at JPMorgan Chase & Co in Hong Kong.
The central bank’s monetary policy will probably be biased toward tightening, Zhu said.
Food prices jumped 6 percent last month from a year earlier, slower than the comparable 10.5 percent rise in January last year
Factory output in the first two months of the year probably rose 10.6 percent from a year earlier, up from a 10.3 percent pace in December last year, according to a Bloomberg survey.
China’s economic growth accelerated to 7.9 percent in the final three months of last year from a year earlier. The pace may pick up to 8.2 percent in the three months through this month, according to the median estimate of 23 economists surveyed by Bloomberg News last month.
“Policy makers should be wary of inflation later this year” with the recovery in economic growth, Lu Ting (陸挺), head of Greater China economics at Bank of America Corp in Hong Kong, said in a note yesterday.
At the same time, “it’s too early to call for significant monetary tightening at present,” he said.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”