China said yesterday it had ended an almost year-long bout of deflation last month while factory output picked up as the world’s third-largest economy powered ahead following the global crisis.
Exports also fell at the slowest pace in a year, official data showed, as overseas demand for Chinese-made goods continued to improve.
Analysts said the strong data showed China’s recovery was gathering pace, stoking debate about when the government should start exiting stimulus put in place a year ago when the worst economic crisis in decades took hold globally.
The nation’s consumer price index, the main gauge of inflation, rose 0.6 percent year on year last month, the first increase since January, the National Bureau of Statistics (NBS) said.
“The mild rise in prices during economic recovery is actually conducive to economic growth and job creation,” Sheng Laiyun (盛來運), spokesman for the National Bureau of Statistics (NBS), told a news conference. “Currently there is still no inflationary pressure.”
The increase was due in part to Beijing’s efforts to raise state-controlled prices for fuel, electricity and water to better reflect market forces.
Prices also likely rose last month because early snowstorms in northern and central China destroyed crops and disrupted transport, driving up the cost of food.
Industrial output, which shows activity in the millions of factories and workshops around the country, expanded 19.2 percent last month from a year ago, up from 16.1 percent in October.
“These data points should put increasing pressure on Beijing to start tightening policy in the months ahead,” said Brian Jackson, a Hong Kong-based senior strategist at Royal Bank of Canada.
China last year unveiled a 4 trillion yuan (US$586 billion) stimulus package along with big tax breaks to boost consumer spending as the global crisis hit its key export markets in the US and Europe.
Beijing said this week it would maintain its pro-growth monetary policy for next year while also pushing on with efforts to stimulate domestic demand and boost exports.
Shipments fell 1.2 percent last month, the slowest decline since November last year when they dropped 2.2 percent. Imports rose for the first time in 13 months. Jing Ulrich (李晶), an economist at JPMorgan, said the data “indicates continued economic recovery” in China.
The NBS also reported yesterday that retail sales, the main measure of consumer spending, rose by 15.8 percent last month compared with the same month a year earlier, down slightly from the 16.2 percent increase posted the previous month.
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