China’s core inflation cooled to its weakest in more than three years, fueling calls for greater efforts to boost household spending as soft demand puts the annual growth target under pressure.
The consumer price index (CPI) excluding volatile food and energy costs rose just 0.3 percent last month from a year earlier, the least since March 2021, the Chinese National Bureau of Statistics (NBS) said yesterday.
The broader CPI increased 0.6 percent, missing expectations even though it was buoyed by higher food costs due to bad weather last month.
Photo: EPA-EFE
Meanwhile, passenger vehicle sales in China fell last month for the fifth consecutive month — down 1.1 percent from the same month a year earlier to 1.92 million vehicles, data from the China Passenger Car Association showed yesterday.
However, sales of all-electric and plug-in hybrid models rose, helped by subsidies for drivers trading in more polluting vehicles.
Taken together, the figures provide further evidence of weak consumer demand in the world’s second-largest economy, prompting calls for more measures to stave off a negative cycle of declining corporate revenue, wages and spending.
“The deflationary pressure in China is getting more entrenched,” Societe Generale SA greater China economist Michelle Lam (林雪潔) said. “This may well fuel a downward price-wage spiral which will require more radical policy response.”
Weak consumption and investment demand have led to intense price wars in sectors including electric vehicles and solar. That is denting China’s chances of reaching its GDP growth goal of about 5 percent, as consumers delay purchases and businesses slash wages.
Prices of vehicles fell 5.5 percent while those of cellphones and other communications equipment dropped 2.1 percent, official data showed.
“The fiscal policy stance needs to become more proactive in order to prevent the deflationary expectations from becoming entrenched,” Pinpoint Asset Management Ltd (保銀私募基金管理) chief economist Zhiwei Zhang (張智威) said.
The modest rise in consumer prices was driven by higher costs of food because of hot weather and heavy rainfall, chief NBS statistician Dong Lijuan (董莉娟) said in a statement accompanying the release.
Factory-gate prices remained stuck in deflation, as they have been since late 2022, with the producer price index last month sliding 1.8 percent from a year earlier, more than economists’ forecast of a 1.5 percent drop, NBS data showed.
Additional reporting by Reuters
When an apartment comes up for rent in Germany’s big cities, hundreds of prospective tenants often queue down the street to view it, but the acute shortage of affordable housing is getting scant attention ahead of today’s snap general election. “Housing is one of the main problems for people, but nobody talks about it, nobody takes it seriously,” said Andreas Ibel, president of Build Europe, an association representing housing developers. Migration and the sluggish economy top the list of voters’ concerns, but analysts say housing policy fails to break through as returns on investment take time to register, making the
‘SILVER LINING’: Although the news caused TSMC to fall on the local market, an analyst said that as tariffs are not set to go into effect until April, there is still time for negotiations US President Donald Trump on Tuesday said that he would likely impose tariffs on semiconductor, automobile and pharmaceutical imports of about 25 percent, with an announcement coming as soon as April 2 in a move that would represent a dramatic widening of the US leader’s trade war. “I probably will tell you that on April 2, but it’ll be in the neighborhood of 25 percent,” Trump told reporters at his Mar-a-Lago club when asked about his plan for auto tariffs. Asked about similar levies on pharmaceutical drugs and semiconductors, the president said that “it’ll be 25 percent and higher, and it’ll
NOT TO WORRY: Some people are concerned funds might continue moving out of the country, but the central bank said financial account outflows are not unusual in Taiwan Taiwan’s outbound investments hit a new high last year due to investments made by contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and other major manufacturers to boost global expansion, the central bank said on Thursday. The net increase in outbound investments last year reached a record US$21.05 billion, while the net increase in outbound investments by Taiwanese residents reached a record US$31.98 billion, central bank data showed. Chen Fei-wen (陳斐紋), deputy director of the central bank’s Department of Economic Research, said the increase was largely due to TSMC’s efforts to expand production in the US and Japan. Investments by Vanguard International
WARNING SHOT: The US president has threatened to impose 25 percent tariffs on all imported vehicles, and similar or higher duties on pharmaceuticals and semiconductors US President Donald Trump on Wednesday suggested that a trade deal with China was “possible” — a key target in the US leader’s tariffs policy. The US in 2020 had already agreed to “a great trade deal with China” and a new deal was “possible,” Trump said. Trump said he expected Chinese President Xi Jinping (習近平) to visit the US, without giving a timeline for his trip. Trump also said that he was talking to China about TikTok, as the US seeks to broker a sale of the popular app owned by Chinese firm ByteDance Ltd (字節跳動). Trump last week said that he had
RSS