Consumer prices fell in China last month for the first time in 13 months, as persistent weak demand was compounded by the early timing of the Lunar New Year holiday.
The Chinese National Bureau of Statistics yesterday said that its consumer price index dropped 0.7 percent last month compared with a year ago. On a monthly basis, prices were down 0.2 percent from January.
While many other countries wrestle with inflation, China’s policymakers face flat to falling prices, and the possibility they could evolve into a deflationary spiral that would drag down the economy.
Photo: AFP
Last week, Beijing stressed the need to increase domestic demand and consumer spending in an annual report to its ceremonial legislature, the Chinese National People’s Congress, but held back on unveiling any dramatic new steps to boost the economy.
The Lunar New Year holiday, a time when spending rises for travel, dining out and entertainment, came in late January this year. Holiday spending helped drive the consumer price index up 0.5 percent in January, but it fell last month compared with last year’s elevated level.
Factoring out the impact of the holiday, the index rose 0.1 percent last month, Chinese National Bureau of Statistics statistician Dong Lijuan (董莉娟) said in a written analysis.
That is still far lower than ideal. Last week’s government annual report included an inflation target of 2 percent for this year, but it is likely to fall far short of that goal. The consumer price index was flat last year, rising 0.2 percent.
A burgeoning trade war with the US could add to China’s economic headwinds.
Besides the early Lunar New Year holiday, two other factors contributed to falling prices last month: Better weather boosted farm production, driving down the price of fresh vegetables, and automakers also stepped up promotions to try to boost sales, reducing prices for new cars, Dong said.
The producer price index, which measures the wholesale price of goods, fell 2.2 percent last month, the statistics bureau said.
Producer prices have been falling more sharply than consumer prices, putting pressure on companies to cut labor and other costs.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) last week recorded an increase in the number of shareholders to the highest in almost eight months, despite its share price falling 3.38 percent from the previous week, Taiwan Stock Exchange data released on Saturday showed. As of Friday, TSMC had 1.88 million shareholders, the most since the week of April 25 and an increase of 31,870 from the previous week, the data showed. The number of shareholders jumped despite a drop of NT$50 (US$1.59), or 3.38 percent, in TSMC’s share price from a week earlier to NT$1,430, as investors took profits from their earlier gains
In a high-security Shenzhen laboratory, Chinese scientists have built what Washington has spent years trying to prevent: a prototype of a machine capable of producing the cutting-edge semiconductor chips that power artificial intelligence (AI), smartphones and weapons central to Western military dominance, Reuters has learned. Completed early this year and undergoing testing, the prototype fills nearly an entire factory floor. It was built by a team of former engineers from Dutch semiconductor giant ASML who reverse-engineered the company’s extreme ultraviolet lithography (EUV) machines, according to two people with knowledge of the project. EUV machines sit at the heart of a technological Cold
TAIWAN VALUE CHAIN: Foxtron is to fully own Luxgen following the transaction and it plans to launch a new electric model, the Foxtron Bria, in Taiwan next year Yulon Motor Co (裕隆汽車) yesterday said that its board of directors approved the disposal of its electric vehicle (EV) unit, Luxgen Motor Co (納智捷汽車), to Foxtron Vehicle Technologies Co (鴻華先進) for NT$787.6 million (US$24.98 million). Foxtron, a half-half joint venture between Yulon affiliate Hua-Chuang Automobile Information Technical Center Co (華創車電) and Hon Hai Precision Industry Co (鴻海精密), expects to wrap up the deal in the first quarter of next year. Foxtron would fully own Luxgen following the transaction, including five car distributing companies, outlets and all employees. The deal is subject to the approval of the Fair Trade Commission, Foxtron said. “Foxtron will be
INFLATION CONSIDERATION: The BOJ governor said that it would ‘keep making appropriate decisions’ and would adjust depending on the economy and prices The Bank of Japan (BOJ) yesterday raised its benchmark interest rate to the highest in 30 years and said more increases are in the pipeline if conditions allow, in a sign of growing conviction that it can attain the stable inflation target it has pursued for more than a decade. Bank of Japan Governor Kazuo Ueda’s policy board increased the rate by 0.2 percentage points to 0.75 percent, in a unanimous decision, the bank said in a statement. The central bank cited the rising likelihood of its economic outlook being realized. The rate change was expected by all 50 economists surveyed by Bloomberg. The
RSS