Chinese producer prices rose at their swiftest pace in more than five years last month, the Chinese government said yesterday, a sign the world’s factory could begin exporting inflation to the global economy.
The producer price index (PPI) rose 5.5 percent year-on-year last month, the Chinese National Bureau of Statistics said, far more than economists’ expectations of 4.6 percent in a Bloomberg News survey.
It marked the fourth straight month of price rises for goods at the factory gate after years of declines and an acceleration from the previous month’s 3.3 percent, raising expectations China’s factories could put upward pressure on global prices through the supply chain.
Rising prices for industrial commodities helped support the forecast-beating PPI figures, the bureau said, as world producers cut supply.
The consumer price index (CPI), a key gauge of retail inflation, rose 2.1 percent year-on-year last month, slightly below expectations.
The figures were affected by warmer temperatures across China, which led to weaker-than-average price increases for fresh fruit and vegetables, the bureau said in a statement.
China is the world’s biggest trader in goods and its performance affects its trading partners from Australia to Zambia, many of which have been mired in tepid inflation for years, which has in turn caused a drag on the global economy.
Chinese firms have been battered by falling prices for their goods in the face of chronic overcapacity and weak demand, putting a damper on growth in the nation.
Protracted falls in factory-gate prices are a bad sign for industrial prospects and economic growth because they put off customers — who seek to delay purchases in anticipation of cheaper deals — starving companies of business and funds.
The ongoing rebound in producer prices could help boost China’s nominal GDP growth this year, Nomura said in a note, though real growth “still faces plenty of headwinds.”
Real estate agent and property developer JSL Construction & Development Co (愛山林) led the average compensation rankings among companies listed on the Taiwan Stock Exchange (TWSE) last year, while contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) finished 14th. JSL Construction paid its employees total average compensation of NT$4.78 million (US$159,701), down 13.5 percent from a year earlier, but still ahead of the most profitable listed tech giants, including TSMC, TWSE data showed. Last year, the average compensation (which includes salary, overtime, bonuses and allowances) paid by TSMC rose 21.6 percent to reach about NT$3.33 million, lifting its ranking by 10 notches
SEASONAL WEAKNESS: The combined revenue of the top 10 foundries fell 5.4%, but rush orders and China’s subsidies partially offset slowing demand Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) further solidified its dominance in the global wafer foundry business in the first quarter of this year, remaining far ahead of its closest rival, Samsung Electronics Co, TrendForce Corp (集邦科技) said yesterday. TSMC posted US$25.52 billion in sales in the January-to-March period, down 5 percent from the previous quarter, but its market share rose from 67.1 percent the previous quarter to 67.6 percent, TrendForce said in a report. While smartphone-related wafer shipments declined in the first quarter due to seasonal factors, solid demand for artificial intelligence (AI) and high-performance computing (HPC) devices and urgent TV-related orders
Prices of gasoline and diesel products at domestic fuel stations are this week to rise NT$0.2 and NT$0.3 per liter respectively, after international crude oil prices increased last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices last week snapped a two-week losing streak as the geopolitical situation between Russia and Ukraine turned increasingly tense, CPC said in a statement. News that some oil production facilities in Alberta, Canada, were shut down due to wildfires and that US-Iran nuclear talks made no progress also helped push oil prices to a significant weekly gain, Formosa said
MINERAL DIPLOMACY: The Chinese commerce ministry said it approved applications for the export of rare earths in a move that could help ease US-China trade tensions Chinese Vice Premier He Lifeng (何立峰) is today to meet a US delegation for talks in the UK, Beijing announced on Saturday amid a fragile truce in the trade dispute between the two powers. He is to visit the UK from yesterday to Friday at the invitation of the British government, the Chinese Ministry of Foreign Affairs said in a statement. He and US representatives are to cochair the first meeting of the US-China economic and trade consultation mechanism, it said. US President Donald Trump on Friday announced that a new round of trade talks with China would start in London beginning today,