Consumer prices fell in China last month for the first time in 13 months, as persistent weak demand was compounded by the early timing of the Lunar New Year holiday.
The Chinese National Bureau of Statistics yesterday said that its consumer price index dropped 0.7 percent last month compared with a year ago. On a monthly basis, prices were down 0.2 percent from January.
While many other countries wrestle with inflation, China’s policymakers face flat to falling prices, and the possibility they could evolve into a deflationary spiral that would drag down the economy.
Photo: AFP
Last week, Beijing stressed the need to increase domestic demand and consumer spending in an annual report to its ceremonial legislature, the Chinese National People’s Congress, but held back on unveiling any dramatic new steps to boost the economy.
The Lunar New Year holiday, a time when spending rises for travel, dining out and entertainment, came in late January this year. Holiday spending helped drive the consumer price index up 0.5 percent in January, but it fell last month compared with last year’s elevated level.
Factoring out the impact of the holiday, the index rose 0.1 percent last month, Chinese National Bureau of Statistics statistician Dong Lijuan (董莉娟) said in a written analysis.
That is still far lower than ideal. Last week’s government annual report included an inflation target of 2 percent for this year, but it is likely to fall far short of that goal. The consumer price index was flat last year, rising 0.2 percent.
A burgeoning trade war with the US could add to China’s economic headwinds.
Besides the early Lunar New Year holiday, two other factors contributed to falling prices last month: Better weather boosted farm production, driving down the price of fresh vegetables, and automakers also stepped up promotions to try to boost sales, reducing prices for new cars, Dong said.
The producer price index, which measures the wholesale price of goods, fell 2.2 percent last month, the statistics bureau said.
Producer prices have been falling more sharply than consumer prices, putting pressure on companies to cut labor and other costs.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) would not produce its most advanced technologies in the US next year, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. Kuo made the comment during an appearance at the legislature, hours after the chipmaker announced that it would invest an additional US$100 billion to expand its manufacturing operations in the US. Asked by Taiwan People’s Party Legislator-at-large Chang Chi-kai (張啟楷) if TSMC would allow its most advanced technologies, the yet-to-be-released 2-nanometer and 1.6-nanometer processes, to go to the US in the near term, Kuo denied it. TSMC recently opened its first US factory, which produces 4-nanometer
GREAT SUCCESS: Republican Senator Todd Young expressed surprise at Trump’s comments and said he expects the administration to keep the program running US lawmakers who helped secure billions of dollars in subsidies for domestic semiconductor manufacturing rejected US President Donald Trump’s call to revoke the 2022 CHIPS and Science Act, signaling that any repeal effort in the US Congress would fall short. US Senate Minority Leader Chuck Schumer, who negotiated the law, on Wednesday said that Trump’s demand would fail, while a top Republican proponent, US Senator Todd Young, expressed surprise at the president’s comments and said he expects the administration to keep the program running. The CHIPS Act is “essential for America leading the world in tech, leading the world in AI [artificial
REACTIONS: While most analysts were positive about TSMC’s investment, one said the US expansion could disrupt the company’s supply-demand balance Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) new US$100 billion investment in the US would exert a positive effect on the chipmaker’s revenue in the medium term on the back of booming artificial intelligence (AI) chip demand from US chip designers, an International Data Corp (IDC) analyst said yesterday. “This is good for TSMC in terms of business expansion, as its major clients for advanced chips are US chip designers,” IDC senior semiconductor research manager Galen Zeng (曾冠瑋) said by telephone yesterday. “Besides, those US companies all consider supply chain resilience a business imperative,” Zeng said. That meant local supply would
Servers that might contain artificial intelligence (AI)-powering Nvidia Corp chips shipped from the US to Singapore ended up in Malaysia, but their actual final destination remains a mystery, Singaporean Minister for Home Affairs and Law K Shanmugam said yesterday. The US is cracking down on exports of advanced semiconductors to China, seeking to retain a competitive edge over the technology. However, Bloomberg News reported in late January that US officials were probing whether Chinese AI firm DeepSeek (深度求索) bought advanced Nvidia semiconductors through third parties in Singapore, skirting Washington’s restrictions. Shanmugam said the route of the chips emerged in the course of an
RSS