China's factory gate inflation eases

AFP
Beijing, China Published: Dec 09, 2018, 03:54 PM(IST)

File photo: Chinese flag. Photograph:( Zee News Network )

Story highlights

The growth of China's trade with the rest of the world slowed last month, with exports up 5.4% and imports up 3% on-year compared with 15.6% and 21.4% respectively in October.

China's factory inflation slowed in November, a sign demand remains weak amid Beijing's ongoing trade war with the United States, while consumer inflation also flagged, official data showed Sunday.

The producer price index an important barometer of the industrial sector that measures the cost of goods at the factory gate climbed 2.7% on-year in November.

It ticked down from 3.3% the previous month, recording its weakest growth since October 2016, while remaining in line with the forecast in a Bloomberg News survey.

A slowdown in factory gate inflation reflects sluggish demand.

The consumer price index (CPI)  a key measure of retail inflation rose 2.2% on-year, compared with 2.5% in October.

Food prices, up 2.5%, rose quicker than non-food prices, which were up 2.1%. Energy prices fell over the month.

"The broad moderation in inflationary pressures appears to be a reflection of weaker demand growth over the past half a year and should alleviate concerns about possible stagflation," said Goldman Sachs Economic Research in a report.

The weak figures come as China's trade war with the US continues to bite and its economy shows signs of slowing. The Asian giant recorded a GDP growth of 6.5% in the third quarter its weakest in nine years.

The growth of China's trade with the rest of the world slowed last month, with exports up 5.4% and imports up 3% on-year compared with 15.6% and 21.4% respectively in October.

Washington and Beijing announced a tariff truce at the start of December, to allow for trade negotiations by delaying a hike in new duties by 90 days.

The US suspended its plans to raise tariffs on $200 billion in Chinese imports to 25 per cent beginning January 1, leaving them at the current 10 per cent rate.

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