China factory gate inflation hits 13-year high
Factory gate inflation hit a 13-year high in August as manufacturers responded to the high cost of commodities, official figures showed.
The producer price index (PPI) rose at an annual rate of 9.5% in August, up from 9% a month earlier and outstripping analyst expectations for no change. The reading, supplied by the National Bureau of Statistics, was the highest since the 10.1% increase recorded in August 2008.
Rising factory prices in the world's biggest exporter threaten to feed through into inflation figures in developed economies such as the US and UK. Some economists have argued inflation is in danger of getting out of control though central banks contend that the increases are a blip fuelled by recovery from Covid-19 shutdowns.
Miguel Chanco, an Asia specialist at Pantheon Macroeconomics, said PPI was likely to ease in the coming months and that China's central bank regards the spike as temporary.
"This final jump was always a threat as the PPI so far has taken in an undersized portion of the rise in spot commodity prices, on a historical comparison," he said. "We think this probably is the peak for the headline, though inflation in the next couple of months probably will stay around these rates."
China's consumer price index rose at an annual rate of 0.8%, down from a 1% gain in July.