China's factory-gate prices experienced their sharpest decline in seven-and-a-half years in June, indicating a weakening demand for industrial and consumer products and highlighting concerns about the country's economic health. This data cited by Reuters, combined with the slowest consumer inflation since 2021, has intensified the call for policymakers to implement additional stimulus measures to revive sluggish demand.

According to the National Bureau of Statistics (NBS), the producer price index (PPI) recorded its ninth consecutive monthly drop in June, down 5.4 per cent compared to the previous year. This decline surpasses the 4.6 per cent decrease observed in the previous month and the 5.0 per cent projected by analysts in a Reuters poll. This steepest decline in the PPI since December 2015 reflects weakened domestic and foreign demand, particularly in the energy, metals, and chemicals sectors.

In contrast, the consumer price index (CPI) remained unchanged year-on-year in June, in contrast to the 0.2 per cent increase observed in May. This was mainly driven by a faster decline in pork prices. The result fell short of the expected 0.2 per cent rise and marked the slowest pace since February 2021. These lower-than-anticipated inflation figures negatively impacted financial markets, leading to a depreciation of the yuan and a decline in Asian stocks.

Economists at Capital Economics anticipate that headline inflation will rise to approximately 1 per cent by the end of the year. Nevertheless, they believe this increase will be moderate and not hinder the ability of the People's Bank of China (PBOC) to further loosen its monetary policy. They argue that fiscal policy will be the primary source of support, considering weak credit demand and currency pressure. They project a minimal additional policy rate cut of only 10 basis points for the remainder of the year. Beijing's target for average consumer inflation in 2023 is around 3 per cent, following a 2 per cent year-on-year price increase in 2022.

China recently implemented policy rate cuts and pledged additional measures to boost liquidity and stimulate household consumption. However, Reuters cited analysts, such as Bruce Pang, Chief Economist at Jones Lang Lasalle, who attributed the accelerating decline in the PPI to the weakened real estate and construction sectors and the strength of industrial production. Pang anticipates that the year-on-year decline in the PPI has likely reached its lowest point and expects a gradual narrowing in the year's second half.

Reuters also cited analysts who predicted further cuts in lending rates by China's central bank. They also expect reductions in the reserve requirements ratio and interest rates in the second half. However, economists caution that small rate cuts may not significantly impact loan demand as households and businesses focus on repairing balance sheets damaged by the COVID-19 pandemic and repaying debts. Consequently, Beijing will likely rely on fiscal stimulus and other measures to stimulate demand.

(With Inputs from Reuters)

China's factory-gate prices experienced their sharpest decline in seven-and-a-half years in June, indicating a weakening demand for industrial and consumer products and highlighting concerns about the country's economic health.

China's factory-gate prices experienced their sharpest decline in seven-and-a-half years in June, indicating a weakening demand for industrial and consumer products and highlighting concerns about the country's economic health. This data cited by Reuters, combined with the slowest consumer inflation since 2021, has intensified the call for policymakers to implement additional stimulus measures to revive sluggish demand. According to the National Bureau of Statistics (NBS), the producer price index (PPI) recorded its ninth consecutive monthly drop in June, down 5.4 per cent compared to the previous year. This decline surpasses the 4.6 per cent decrease observed in the previous month and the 5.0 per cent projected by analysts in a Reuters poll. This steepest decline in the PPI since December 2015 reflects weakened domestic and foreign demand, particularly in the energy, metals, and chemicals sectors. In contrast, the consumer price index (CPI) remained unchanged year-on-year in June, in contrast to the 0.2 per cent increase observed in May. This was mainly driven by a faster decline in pork prices. The result fell short of the expected 0.2 per cent rise and marked the slowest pace since February 2021. These lower-than-anticipated inflation figures negatively impacted financial markets, leading to a depreciation of the yuan and a decline in Asian stocks. Economists at Capital Economics anticipate that headline inflation will rise to approximately 1 per cent by the end of the year. Nevertheless, they believe this increase will be moderate and not hinder the ability of the People's Bank of China (PBOC) to further loosen its monetary policy. They argue that fiscal policy will be the primary source of support, considering weak credit demand and currency pressure. They project a minimal additional policy rate cut of only 10 basis points for the remainder of the year. Beijing's target for average consumer inflation in 2023 is around 3 per cent, following a 2 per cent year-on-year price increase in 2022. China recently implemented policy rate cuts and pledged additional measures to boost liquidity and stimulate household consumption. However, Reuters cited analysts, such as Bruce Pang, Chief Economist at Jones Lang Lasalle, who attributed the accelerating decline in the PPI to the weakened real estate and construction sectors and the strength of industrial production. Pang anticipates that the year-on-year decline in the PPI has likely reached its lowest point and expects a gradual narrowing in the year's second half. Reuters also cited analysts who predicted further cuts in lending rates by China's central bank. They also expect reductions in the reserve requirements ratio and interest rates in the second half. However, economists caution that small rate cuts may not significantly impact loan demand as households and businesses focus on repairing balance sheets damaged by the COVID-19 pandemic and repaying debts. Consequently, Beijing will likely rely on fiscal stimulus and other measures to stimulate demand. (With Inputs from Reuters)

Deflating Demand: China's factory gate prices plummet at record pace

Scores of people holding a demonstration at a factory producing COVID-19 antigen kits clashed with the police, several videos that went viral on social media on Sunday showed.

According to Reuters news agency, the incident took place on Saturday when the workers were protesting for wages and against layoff by the manufacturer, Zybio, in the central municipality of Chongqing.

Police and Zybio are yet to respond to this situation, but several media outlets reported that the protest pertained to wage-related issues and the layoffs of workers who were recruited recently.

"All the workers' demands are economic in nature," said a man in one video who called himself a "Marxist-Leninist-Maoist", reports AFP news agency. He asserted that their protest had no political undertones and was purely against the management.

One of the clips showed people hurling throwing traffic cones, boxes and stools at police carrying riot shields. While another video, posted on Twitter and Douyin, showed dozens of protesters chanting "return our money".

<div class="ui-state-default" contenteditable="false">
<div class="twitter-block" draggable="false">
<blockquote class="twitter-tweet">
我靠 重庆那边人这么猛？ <a href="https://t.co/kWbOZzutaP">pic.twitter.com/kWbOZzutaP</a>
— QINGEN XU 徐勤根 (@QingenXu) <a href="https://twitter.com/QingenXu/status/1611690804984123395?ref_src=twsrc%5Etfw">January 7, 2023</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></div>
<a class="close-mark close-div" href="#" id="jqclosemark">×</a></div>

<div class="ui-state-default" contenteditable="false">
<div class="twitter-block" draggable="false">
<blockquote class="twitter-tweet">
Jan 7, at <a href="https://twitter.com/hashtag/Chongqing?src=hash&amp;ref_src=twsrc%5Etfw">#Chongqing</a> city, <a href="https://twitter.com/hashtag/CCPChina?src=hash&amp;ref_src=twsrc%5Etfw">#CCPChina</a>, workers clashed with <a href="https://twitter.com/hashtag/CCP?src=hash&amp;ref_src=twsrc%5Etfw">#CCP</a> police whn they protested against their employer, ZY Bio(中元汇吉药厂) ‘s sudden announcement that some 10K employees would be laid off.<a href="https://twitter.com/hashtag/ChinaProtests?src=hash&amp;ref_src=twsrc%5Etfw">#ChinaProtests</a> <a href="https://twitter.com/hashtag/China?src=hash&amp;ref_src=twsrc%5Etfw">#China</a> <a href="https://twitter.com/hashtag/ChinaUprising?src=hash&amp;ref_src=twsrc%5Etfw">#ChinaUprising</a> <a href="https://t.co/Ptt1t0qBbg">pic.twitter.com/Ptt1t0qBbg</a>
— Inconvenient Truths by Jennifer Zeng 曾錚真言 (@jenniferzeng97) <a href="https://twitter.com/jenniferzeng97/status/1611861096402403330?ref_src=twsrc%5Etfw">January 7, 2023</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></div>
<a class="close-mark close-div" href="#" id="jqclosemark">×</a></div>

Immediately after the protest, the officials censored anything related to the incident on social media, with AFP claiming that the hashtag "Chongqing Dadukou Pharmaceutical Factory" was not visible a day after on the popular Weibo social media platform Sunday.

&nbsp;Only one post from the previous day is still appearing on Weibo, with a user describing the protest as an "interesting topic".

Whereas a video posted on video sharing app TikTok belonging to a state-owned news outlet showed what it claimed was a street littered with antigen tests in a Chongqing industrial park.

"Sources say a labour dispute triggered conflict," the caption read. The video was taken down within hours.

The enforcement officials have heightened their security after witnessing series of protests last year including worker unrest at Apple supplier Foxconn's massive iPhone factory in central China, as well as widespread protests in Chinese cities and top universities against Covid restrictions.

(With inputs from agencies)

WATCH WION LIVE HERE: 

<iframe allow="accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture" allowfullscreen="" frameborder="0" height="350" loading="”lazy”" src="https://www.wionews.com/live-tv/embed?autoplay=1&amp;mute=1" width="100%"></iframe>

Scores of people holding a demonstration at a factory producing COVID-19 antigen kits clashed with the police, several videos that went viral on social media on Sunday showed.

Scores of people holding a demonstration at a factory producing COVID-19 antigen kits clashed with the police, several videos that went viral on social media on Sunday showed. According to Reuters news agency, the incident took place on Saturday when the workers were protesting for wages and against layoff by the manufacturer, Zybio, in the central municipality of Chongqing. Police and Zybio are yet to respond to this situation, but several media outlets reported that the protest pertained to wage-related issues and the layoffs of workers who were recruited recently. "All the workers' demands are economic in nature," said a man in one video who called himself a "Marxist-Leninist-Maoist", reports AFP news agency. He asserted that their protest had no political undertones and was purely against the management. One of the clips showed people hurling throwing traffic cones, boxes and stools at police carrying riot shields. While another video, posted on Twitter and Douyin, showed dozens of protesters chanting "return our money". 我靠 重庆那边人这么猛？ pic.twitter.com/kWbOZzutaP — QINGEN XU 徐勤根 (@QingenXu) January 7, 2023 × Jan 7, at #Chongqing city, #CCPChina, workers clashed with #CCP police whn they protested against their employer, ZY Bio(中元汇吉药厂) ‘s sudden announcement that some 10K employees would be laid off.#ChinaProtests #China #ChinaUprising pic.twitter.com/Ptt1t0qBbg — Inconvenient Truths by Jennifer Zeng 曾錚真言 (@jenniferzeng97) January 7, 2023 × Immediately after the protest, the officials censored anything related to the incident on social media, with AFP claiming that the hashtag "Chongqing Dadukou Pharmaceutical Factory" was not visible a day after on the popular Weibo social media platform Sunday. Only one post from the previous day is still appearing on Weibo, with a user describing the protest as an "interesting topic". Whereas a video posted on video sharing app TikTok belonging to a state-owned news outlet showed what it claimed was a street littered with antigen tests in a Chongqing industrial park. "Sources say a labour dispute triggered conflict," the caption read. The video was taken down within hours. The enforcement officials have heightened their security after witnessing series of protests last year including worker unrest at Apple supplier Foxconn's massive iPhone factory in central China, as well as widespread protests in Chinese cities and top universities against Covid restrictions. (With inputs from agencies) WATCH WION LIVE HERE:

Watch: Workers clash with police amidst massive protest at Covid antigen factory in China

Chinese factory activity contracted in September for the first time since the height of its initial coronavirus outbreak in February 2020, official data showed Thursday, as it faces waves of power outages and fears for the real estate sector.

The Purchasing Managers' Index (PMI) -- a key gauge of manufacturing activity in the world's second-largest economy -- slipped to 49.6 from 50.1 in August, the National Bureau of Statistics said.

Any figure below the 50-point mark represents contraction, while above it indicates growth.&nbsp;

It is the first time China's PMI has contracted since Covid first began spreading around the country, forcing the government to impose lockdowns that led factories to shut and battered the world's number two economy.

But now authorities are struggling to tackle an energy crunch caused by tight coal supplies and sky-high prices, leading to factory suspensions and power blackouts in at least 17 provinces in recent months. &nbsp;

The growing power crisis, exacerbated by local government restrictions on factories to cut energy use, has led some major banks to lower their annual growth forecast for China, while there are also concerns about the impact on supply chains for global firms such as Apple and Tesla.

NBS senior statistician Zhao Qinghe said the PMI fell below the threshold because of "the relatively low prosperity of energy-intensive industries".

Julian Evans-Pritchard of Capital Economics warned: "Industry looks set for further weakness given that property construction is in the early stages of structural slowdown, power rationing may persist for some time and exports are likely to drop back as global consumption patterns normalise."

The figure was slightly below the forecast of Bloomberg analysts, who expected a small rebound after successfully containing recent coronavirus outbreaks.

While China's economy has largely bounced back from the initial blow of the pandemic, multiple outbreaks in the summer hit domestic tourism and manufacturing as fresh containment measures and lockdowns were introduced in swathes of the country.

As a result, China's non-manufacturing PMI -- which measures activity in construction and services -- shrank in August for the first time since the pandemic began, but rebounded back to growth in September.

Default fears around Chinese real estate giant Evergrande -- bogged down in a $300 billion debt quagmire -- have also hit consumer confidence, as the government tries to stop financial risk from spilling over into the rest of the property sector.

Zhiwei Zhang, chief economist at Pinpoint Asset Management, said the weak PMI would serve as an "alarm" for the government.

"Economic growth in Q4 will likely slow further without a change of government policies, and the pace of slowdown may pick up," he said.&nbsp;

Chinese factory activity contracted in September for the first time since the height of its initial coronavirus outbreak in February 2020, official data showed Thursday, as it faces waves of power outages and fears for the real estate sector.

Chinese factory activity contracted in September for the first time since the height of its initial coronavirus outbreak in February 2020, official data showed Thursday, as it faces waves of power outages and fears for the real estate sector. The Purchasing Managers' Index (PMI) -- a key gauge of manufacturing activity in the world's second-largest economy -- slipped to 49.6 from 50.1 in August, the National Bureau of Statistics said. Any figure below the 50-point mark represents contraction, while above it indicates growth. It is the first time China's PMI has contracted since Covid first began spreading around the country, forcing the government to impose lockdowns that led factories to shut and battered the world's number two economy. But now authorities are struggling to tackle an energy crunch caused by tight coal supplies and sky-high prices, leading to factory suspensions and power blackouts in at least 17 provinces in recent months. The growing power crisis, exacerbated by local government restrictions on factories to cut energy use, has led some major banks to lower their annual growth forecast for China, while there are also concerns about the impact on supply chains for global firms such as Apple and Tesla. NBS senior statistician Zhao Qinghe said the PMI fell below the threshold because of "the relatively low prosperity of energy-intensive industries". Julian Evans-Pritchard of Capital Economics warned: "Industry looks set for further weakness given that property construction is in the early stages of structural slowdown, power rationing may persist for some time and exports are likely to drop back as global consumption patterns normalise." The figure was slightly below the forecast of Bloomberg analysts, who expected a small rebound after successfully containing recent coronavirus outbreaks. While China's economy has largely bounced back from the initial blow of the pandemic, multiple outbreaks in the summer hit domestic tourism and manufacturing as fresh containment measures and lockdowns were introduced in swathes of the country. As a result, China's non-manufacturing PMI -- which measures activity in construction and services -- shrank in August for the first time since the pandemic began, but rebounded back to growth in September. Default fears around Chinese real estate giant Evergrande -- bogged down in a $300 billion debt quagmire -- have also hit consumer confidence, as the government tries to stop financial risk from spilling over into the rest of the property sector. Zhiwei Zhang, chief economist at Pinpoint Asset Management, said the weak PMI would serve as an "alarm" for the government. "Economic growth in Q4 will likely slow further without a change of government policies, and the pace of slowdown may pick up," he said.

China factory activity shrinks for first time since February 2020

China&#39;s factories and workshops saw their output slow sharply in April, data showed Monday, as the world&#39;s second-largest economy grapples with tighter credit and weaker demand.

The data comes as China hosts an international summit showcasing its Silk Road plan, an ambitious infrastructure project it hopes will revive ancient trading routes and breathe life into its sputtering economy.&nbsp;

Industrial production rose 6.5 per cent from a year ago, the National Bureau of Statistics said, compared with 7.6 per cent in March and forecasts of 7.0 per cent in a survey by Bloomberg News.&nbsp;

Other figures also disappointed. April retail sales rose 10.7 per cent year-on-year, below the previous month&#39;s reading and estimates of 10.8 per cent.&nbsp;

Fixed-asset investment excluding rural areas -- a gauge of spending on real estate, roads and bridges -- rose 8.9 per cent in the first four months of the year, compared with 9.2 per cent in January-March.&nbsp;

&quot;All the data sends the same message: The economy slowed down meaningfully in April,&quot; Larry Hu, head of China economics at Macquarie Securities in Hong Kong, told Bloomberg News.&nbsp;

&quot;But given that growth is still fine, in the second quarter policymakers will still focus on reducing financial risk.&quot;

China&#39;s One Belt, One Road initiative -- a massive network of ports, railways, roads and industrial parks in Asia, Europe and Africa hailed by President Xi Jinping as &quot;a project of the century&quot; -- could provide fresh impetus for growth in the Asian giant.

In recent years China has been transitioning from an investment-driven economic model to one more reliant on consumer spending, but it has been a bumpy ride.

Debt worries

The crucial manufacturing sector is struggling in the face of weaker global demand and excess industrial capacity left over from a debt-fuelled infrastructure boom.

Years of unregulated and risky lending has also raised fears of a looming debt crisis that the International Monetary Fund has warned could &quot;imperil global financial stability&quot;.

The banking regulator recently unveiled measures to rein in dangerous lending and strengthening institutional transparency and chronically weak internal controls.

But analysts have expressed scepticism about Beijing&#39;s willingness to quit its debt addiction cold turkey given freewheeling credit has underpinned the growth China&#39;s Communist Party relies on for political legitimacy.

ANZ researchers said China appeared to be returning &quot;to an investment-driven growth strategy&quot; with projects such as One Belt, One Road providing a strong infrastructure pipeline.

In the first three months of the year China expanded a better-than-expected 6.9 per cent, raising hopes the economy was stabilising after the 2016 growth rate of 6.7 per cent, which was the slowest in a quarter of a century.&nbsp;

Still, analysts expect further deceleration this year and the government unveiled in March a trimmed 2017 growth target of &quot;around 6.5 per cent&quot;.

&quot;Slowing domestic consumption growth and softer external demand appear to have driven the slowdown in China at the start of the second quarter,&quot; said Julian Evans-Pritchard from Capital Economics.

The strength in infrastructure and property investment last month were not sustainable &quot;given that policy is being tightened and the property market is starting to cool&quot;.

(AFP)

China factory output slows in April as credit tightens

China's factories and workshops saw their output slow sharply in April, data showed Monday, as the world's second-largest economy grapples with tighter credit and weaker demand. The data comes as China hosts an international summit showcasing its Silk Road plan, an ambitious infrastructure project it hopes will revive ancient trading routes and breathe life into its sputtering economy. Industrial production rose 6.5 per cent from a year ago, the National Bureau of Statistics said, compared with 7.6 per cent in March and forecasts of 7.0 per cent in a survey by Bloomberg News. Other figures also disappointed. April retail sales rose 10.7 per cent year-on-year, below the previous month's reading and estimates of 10.8 per cent. Fixed-asset investment excluding rural areas -- a gauge of spending on real estate, roads and bridges -- rose 8.9 per cent in the first four months of the year, compared with 9.2 per cent in January-March. "All the data sends the same message: The economy slowed down meaningfully in April," Larry Hu, head of China economics at Macquarie Securities in Hong Kong, told Bloomberg News. "But given that growth is still fine, in the second quarter policymakers will still focus on reducing financial risk." China's One Belt, One Road initiative -- a massive network of ports, railways, roads and industrial parks in Asia, Europe and Africa hailed by President Xi Jinping as "a project of the century" -- could provide fresh impetus for growth in the Asian giant. In recent years China has been transitioning from an investment-driven economic model to one more reliant on consumer spending, but it has been a bumpy ride. Debt worries The crucial manufacturing sector is struggling in the face of weaker global demand and excess industrial capacity left over from a debt-fuelled infrastructure boom. Years of unregulated and risky lending has also raised fears of a looming debt crisis that the International Monetary Fund has warned could "imperil global financial stability". The banking regulator recently unveiled measures to rein in dangerous lending and strengthening institutional transparency and chronically weak internal controls. But analysts have expressed scepticism about Beijing's willingness to quit its debt addiction cold turkey given freewheeling credit has underpinned the growth China's Communist Party relies on for political legitimacy. ANZ researchers said China appeared to be returning "to an investment-driven growth strategy" with projects such as One Belt, One Road providing a strong infrastructure pipeline. In the first three months of the year China expanded a better-than-expected 6.9 per cent, raising hopes the economy was stabilising after the 2016 growth rate of 6.7 per cent, which was the slowest in a quarter of a century. Still, analysts expect further deceleration this year and the government unveiled in March a trimmed 2017 growth target of "around 6.5 per cent". "Slowing domestic consumption growth and softer external demand appear to have driven the slowdown in China at the start of the second quarter," said Julian Evans-Pritchard from Capital Economics. The strength in infrastructure and property investment last month were not sustainable "given that policy is being tightened and the property market is starting to cool". (AFP)

china-factory

China Factory, News on China Factory, stories on China Factory, articles on China Factory, China Factory stories at Wion, China Factory news, China Factory latest news

china factory

Deflating Demand: China's factory gate prices plummet at record pace

Watch: Workers clash with police amidst massive protest at Covid antigen factory in China

China factory activity shrinks for first time since February 2020

China factory output slows in April as credit tightens