China factory price inflation falls as trade war pressure grows

Andrew Cummings
July 10, 2019

China's producer prices flatlined in June on lower oil prices and weak global demand, fuelling concerns that a slowdown in manufacturing from a bruising trade war will further drag on growth in the world's second-biggest economy.

Last month's drop in PPI growth year-on-year was mainly due to continuously falling oil prices and last year's high comparison base, economists with Nomura International (Hong Kong) Ltd. said in a note.

ECONOMIC NEWS: China Consumer Prices Unchanged At 2.7% On Year In June - China consumer prices added 2.7% on year in June, the National Bureau of Statistics said on Wednesday and unchanged from the May reading.

The average price of fresh fruit soared 42.7% year-on-year in June, more than one-and-a-half times the growth of 26.7% in the previous month and hitting the highest level since June 2006, NBS data showed.

BEIJING, July 10 ― Factory prices in China were unchanged in June from a year ago, data showed today, reviving the prospect of deflation as the USA trade war hits the crucial manufacturing sector.

A cooling in producer prices, seen as a gauge of industrial demand that gives momentum to investment and profits in the Chinese economy, may rekindle worries about deflation and prompt the authorities to launch more aggressive stimulus. "We do see some downward pressures to the data coming next week".

Non-food prices rose 1.4 percent year on year, 0.2 percentage points lower than that of May.

Consumer price inflation in the people's Republic of China was steady in June, despite a sharp rise in pork prices in the wake of the wave of Africa swine fever.

But as the rise in pork prices - a Chinese staple - accelerated from 18.2% in May to 21.1% for June, so too food price inflation picked up from 7.7% to 8.3%.

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