- China’s consumer price index fell by 0.2% in October compared to the same month last year, exceeding the expected decline of 0.1%.
- The producer price index fell by 2.6% last month, the 13th consecutive month of decline.
Employees work on an assembly line for LED lighting products in China.
Video Visual China Group | Getty Images
Chinese consumer prices fell in October as the world’s second-largest economy struggled with an uneven recovery after the coronavirus outbreak.
According to data released Thursday by China’s National Bureau of Statistics, October Consumer price index fell The decline was 0.2% compared to the previous year, exceeding the 0.1% decline expected by economists polled by Reuters.
This comes after China’s CPI unexpectedly flattened in September, highlighting the need for further policy support.
producer price The decline was 2.6%, slightly smaller than the expected 2.7% decline, marking the 13th consecutive month of decline.Chinese PPI was 2.5% in 2020. September showed that deflationary pressures in factories remain.
“China is still in a deflationary environment. Domestic demand remains weak,” said Zhiwei Zhang, president and chief economist at Pinpoint Asset Management.
The Chinese government is providing targeted policy support, even though recent data suggests growth remains weak. Further deteriorating consumer confidence is the ongoing debt crisis at two of China’s largest real estate developers. China’s real estate sector accounts for about 30% of the economy.
“Domestic demand is likely to improve next year as the budget deficit widens and real estate developers may receive support from the government,” Zhang said.
Investors will now focus on this year’s Singles’ Day shopping festival, which ends on Nov. 11, to gauge the strength of China’s spending.
But the excitement of the shopping festival has faded.
“I don’t think this year’s Singles’ Day sales have met expectations,” Hao Hong, partner and chief economist at Grow Investment Group, told CNBC’s “Squawk Box Asia.”
“Since last year, people haven’t spent as much money on Singles’ Day sales, so this year will be a quiet year for sales,” Hong said.
