China Shows Signs of Producer Price Inflation Transmitting to Consumer Prices (Comprehensive)

PPI Hits Highest Increase in 25 Years at 13.5%, CPI Rises 1.5% Marking This Year's Peak
Rising International Commodity Prices Cause... Growing Global Inflation Concerns

[Asia Economy Beijing=Special Correspondent Jo Young-shin] As international raw material prices such as coal surged, China's Producer Price Index (PPI) growth rate in October once again recorded an all-time high. The Consumer Price Index (CPI), which had shown relative stability, also rose, indicating signs of price instability.

China's National Bureau of Statistics announced on the 10th that the October PPI rose 13.5% year-on-year. This is the highest growth rate in 25 years since statistics began being compiled in 1996. China's PPI has been setting new monthly growth records.

By industry, the ex-factory price of coal mining rose 103.7% year-on-year, followed by oil and natural gas extraction (59.7%), fuel processing such as petroleum and coal (53.0%), and chemical raw materials (31.5%), all showing large increases in ex-factory prices. The rise in international prices of coal, oil, and natural gas appears to have directly impacted China's PPI.

The sharp rise in PPI means that production costs in China's manufacturing industry have increased. This inevitably affects manufacturing prices of industrial goods worldwide.

Signs of the previously feared transmission from producer prices to consumer prices have also appeared. Last month, the CPI rose 1.5% year-on-year. The CPI had shown stability after peaking at 1.3% in May, with 1.1% in June, 1.0% in July, 0.8% in August, and 0.7% in September.

Last month, both food and non-food prices rose 2.4% year-on-year. In particular, the sharp rise in prices of fresh foods such as vegetables appears to have driven the CPI increase. The average wholesale price of 28 types of vegetables nationwide in China in October was 5.23 yuan per kilogram, up 16% from the previous month and 12.5% year-on-year. The CPI increase is analyzed to be due to reduced production caused by adverse weather, rising fertilizer prices, and increased logistics and labor costs.

China's National Bureau of Statistics explained that the CPI rise was caused by a combination of factors including abnormal weather such as adverse climate, supply-demand imbalances of some goods, and rising costs.

They also added that the rise in international raw material prices expanded the magnitude of the PPI increase.

This content was produced with the assistance of AI translation services.