China’s factory gate prices last month surged more than expected, fueled by rapid gains in commodity prices, adding to global inflation concerns.
The producer price index (PPI) rose 6.8 percent from a year earlier, its fastest pace since October 2017, following a 4.4 percent gain in March, the Chinese National Bureau of Statistics (NBS) said yesterday.
The median forecast was for a 6.5 percent increase.
Photo: AFP
The consumer price index (CPI) increased 0.9 percent year-on-year, slightly below the 1 percent gain projected by economists.
The commodities boom, fueled by rising global demand and supply shortages, has stoked concerns about inflation around the world.
With China being the world’s biggest exporter, its rising cost pressures for the nation’s factories pose another risk to global inflation as manufacturers start passing on higher prices to retailers.
Surging factory prices stem from “a combination of domestic and international factors,” ING Bank NV greater China chief economist Iris Pang (彭藹嬈) said.
They include strong domestic demand for raw materials due to the momentum of infrastructure and property projects in China, as well as expectations of higher material prices globally due to the US’ infrastructure building plan, Pang said.
The gain in producer prices was due to a steady recovery in domestic production, and rising prices of iron ore and non-ferrous metal, the NBS said.
Consumer inflation remained relatively subdued amid lower pork prices, a key element in the country’s CPI basket.
Central bankers from the US Federal Reserve and elsewhere maintain that price gains are temporary.
In China, policymakers said that the effects of commodity prices on the domestic economy would be limited and that price growth remains generally under control, but officials have pledged to strengthen controls on the prices of raw materials to limit costs to companies.
The widening gap between CPI and PPI “suggests an uneven recovery of the economy,” said Raymond Yeung (楊宇霆), chief China economist at Australia & New Zealand Banking Group Ltd. “Despite the commodity boom, the service sector has yet to catch up.”
Wages are lagging and the central bank is likely to keep its policy stance “largely neutral,” he said.
The People’s Bank of China is seeking to scale back the stimulus that it pumped into the economy during last year, worried by the buildup of debt.
The Chinese government aims to keep consumer inflation at about 3 percent this year, but an NBS official said in an interview that the headline index is expected to be “significantly lower” than the official target this year.
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
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],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained