China’s producer inflation last month accelerated to a six-month high, lifted by strong commodity prices and threatening to put more pressure on the country’s exporters as a trade war escalates between Washington and Beijing.
Annual consumer inflation also edged up as food prices rose at a faster pace, official data showed yesterday, though the central bank is likely to remain more focused on cushioning the slowing economy than retail prices.
The US and China last week slapped tariffs on US$34 billion of each others’ goods, fueling fears of a prolonged battle that would hurt global trade, investment and growth, while also damaging US farm exports and potentially driving up food prices in China.
The producer price index (PPI) — a gauge of industrial profitability — last month rose by a stronger-than-expected 4.7 percent from a year earlier, compared with a 4.1 percent increase in May, according to the Chinese National Bureau of Statistics.
China’s producer inflation has now picked up for three months in a row after easing late last year.
On a month-on-month basis, the PPI rose 0.3 percent last month, compared with 0.4 percent growth in May.
Analysts polled by Reuters had expected last month’s producer inflation would pick up to 4.5 percent, buoyed by a recovery in global commodity prices.
Raw material prices jumped 8.8 percent from a year earlier, compared with a 7.4 percent increase in May.
The higher prices have helped fuel sharp gains in earnings, with profits at China’s industrial firms growing at a sizzling pace in May.
However, much of the jump has been in prices of resources, such as oil and coal, and other raw materials, benefiting producers, but raising input costs for manufacturers such as exporters who are further along supply chains.
The intensifying trade dispute with the US did rattle China’s commodity markets last month, after both sides imposed tit-for-tat duties on each other’s imports on Friday.
CPI UP 1.9 PERCENT
The consumer price index (CPI) last month rose 1.9 percent from a year earlier, in line with expectations for a slight pickup from May’s gain of 1.8 percent.
The CPI fell 0.1 percent on a monthly basis.
The core consumer price index, which strips out volatile food and energy prices, was unchanged at 1.9 percent.
The food price index rose 0.3 percent from a year earlier, after ticking up 0.1 percent in May. Non-food prices rose 2.2 percent, compared with 2.2 percent growth a month earlier.
Prices of agricultural products in particular are expected to jump after Beijing imposed tariffs on imports of US soybeans and other products used to feed its huge livestock sector.
Polytronics Technology Corp (聚鼎科技) yesterday announced that it is buying Henkel AG’s thermal clad dielectric material (TCLAD) business division for US$26 million as the Taiwanese firm aims to improve its technology, product portfolio and revenue performance. Polytronics, headquartered in the Hsinchu Science Park (新竹科學園區), is a supplier of protection components and heat dissipation materials. The firm entered the metallic heat-dissipation substrate market in 2007 and developed a unique solventless production process. Its board of directors approved signing an agreement with Henkel to acquire the German chemical firm’s TCLAD division in the US. The purchase includes all assets and business interests, including equipment,
SIZE MATTERS: Medium-sized hotels that do not have the support of parent groups are more vulnerable and are forced to take action, a REPro Knight Frank researcher said About 50 hotels across Taiwan are seeking to exit the market as they succumb to the bleak business outlook amid international travel restrictions imposed to combat the COVID-19 pandemic. Yomi Hotel (優美飯店) on Minsheng E Road, Sec 1, in Taipei is seeking to transfer ownership with an asking price of NT$950 million (US$32.15 million) and a pledge for a lease contract that guarantees a 3 percent return. The budget hotel, with room rates that start from NT$1,400 per night, maintains normal operations, but has been struggling since March, when the government placed restrictions on inbound and outbound travel. Occupancy rates for hotels in
With the US dollar expected to weaken in the next 12 months due to near-zero interest rates, investors should consider purchasing US corporate bonds, Standard Chartered Bank Taiwan Ltd (渣打台灣銀行) said on Thursday. The bank said that the US Federal Reserve since last month has been buying bonds issued by US companies to curb default rates. The US dollar is forecast to be weaker against the pound, the euro and the yen, as well as the Canadian dollar, the Swedish krona and the Swiss franc, as the greenback lacks high investment returns after the Fed in March slashed the benchmark interest rate
A Bollywood actor’s face tattooed on his arm, Sandeep Bacche’s devotion shocks few in India where stars enjoy semi-divine status, but even there the hallowed silver screen might be losing its shine to streaming services and pandemic fears. “Whenever things get better and theaters begin operations, I will watch three movies a day for sure just as a way to celebrate,” said the Mumbai rickshaw driver, who is recovering from the virus himself. However, others might not join the party. With cinemas shut for months due to a COVID-19 lockdown, and little prospect they will reopen soon, frustrated Bollywood producers have turned to