China’s consumer inflation last month slowed to the weakest pace in two years, while producer prices fell further into deflation, fueling debate about whether more policy stimulus is needed.
The consumer price index (CPI) rose 0.1 percent from a year earlier, the Chinese National Bureau of Statistics (NBS) said yesterday, reflecting muted domestic demand as well as base effects from April last year’s Shanghai lockdown.
Core CPI, which excludes volatile food and energy costs, was unchanged at 0.7 percent.
Photo: Bloomberg
Producer prices fell 3.6 percent last month as commodity costs softened. The figure was more than March’s drop and deeper than economists had expected.
“There is still a big gap between demand and its pre-pandemic trend,” Australia & New Zealand Banking Group Ltd senior China strategist Xing Zhaopeng (邢兆鵬) said.
“We do not think domestic demand can improve significantly in the near-term,” Xing added, estimating that it would take three to five years to rebound.
China’s economic growth accelerated to a one-year high in the first quarter, but recent data on contracting manufacturing activity and weakening trade have flashed warning signs that the recovery might be waning.
That has created speculation about whether the central bank would ease policy — and they have some scope to do so, given the US Federal Reserve signaled a potential pause in interest rate hikes and the latest data showed US inflation cooled somewhat last month.
Chinese banks might also have room to lower lending rates going forward after some of them cut their deposit rates recently.
A high base of comparison with April last year weighed on last month’s data, NBS analyst Dong Lijuan (董莉娟) said in a statement.
Consumer prices had increased rapidly then as COVID-19 lockdowns in major cities — including Shanghai — battered supply chains and pushed people to stockpile food.
Slower rises in food and energy costs pushed inflation lower. Food prices rose 0.4 percent last month from a year earlier, compared with a 2.4 percent increase in March, with pressures on pork prices waning.
Producer-price deflation is also being driven by falling costs for commodities like iron ore and crude oil.
The New Taiwan dollar is on the verge of overtaking the yuan as Asia’s best carry-trade target given its lower risk of interest-rate and currency volatility. A strategy of borrowing the New Taiwan dollar to invest in higher-yielding alternatives has generated the second-highest return over the past month among Asian currencies behind the yuan, based on the Sharpe ratio that measures risk-adjusted relative returns. The New Taiwan dollar may soon replace its Chinese peer as the region’s favored carry trade tool, analysts say, citing Beijing’s efforts to support the yuan that can create wild swings in borrowing costs. In contrast,
Nvidia Corp’s demand for advanced packaging from Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) remains strong though the kind of technology it needs is changing, Nvidia CEO Jensen Huang (黃仁勳) said yesterday, after he was asked whether the company was cutting orders. Nvidia’s most advanced artificial intelligence (AI) chip, Blackwell, consists of multiple chips glued together using a complex chip-on-wafer-on-substrate (CoWoS) advanced packaging technology offered by TSMC, Nvidia’s main contract chipmaker. “As we move into Blackwell, we will use largely CoWoS-L. Of course, we’re still manufacturing Hopper, and Hopper will use CowoS-S. We will also transition the CoWoS-S capacity to CoWos-L,” Huang said
Nvidia Corp CEO Jensen Huang (黃仁勳) is expected to miss the inauguration of US president-elect Donald Trump on Monday, bucking a trend among high-profile US technology leaders. Huang is visiting East Asia this week, as he typically does around the time of the Lunar New Year, a person familiar with the situation said. He has never previously attended a US presidential inauguration, said the person, who asked not to be identified, because the plans have not been announced. That makes Nvidia an exception among the most valuable technology companies, most of which are sending cofounders or CEOs to the event. That includes
INDUSTRY LEADER: TSMC aims to continue outperforming the industry’s growth and makes 2025 another strong growth year, chairman and CEO C.C. Wei says Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), a major chip supplier to Nvidia Corp and Apple Inc, yesterday said it aims to grow revenue by about 25 percent this year, driven by robust demand for artificial intelligence (AI) chips. That means TSMC would continue to outpace the foundry industry’s 10 percent annual growth this year based on the chipmaker’s estimate. The chipmaker expects revenue from AI-related chips to double this year, extending a three-fold increase last year. The growth would quicken over the next five years at a compound annual growth rate of 45 percent, fueled by strong demand for the high-performance computing
RSS