China's producer prices rose 5% in September, the highest in four years... Consumer prices rose 0.9%

(Seoul = Yonhap News) Reporter Kwon Sook-hee = Amid rising international oil prices and raw material costs, China's producer prices rose sharply last month, reaching the highest level in more than four years.

Consumer prices continued to rise, but fell below market expectations as the rate of increase was limited due to sluggish domestic demand.

According to China's National Bureau of Statistics on the 14th, China's Producer Price Index (PPI) in September rose 5.0% compared to the same month last year.

This is higher than the August increase rate (3.8%) and also exceeds the September PPI increase forecast compiled by Reuters (4.5%). It is also the highest rate of increase since June 2022.

China's monthly PPI growth rate has been negative for more than three years since October 2022 during the COVID-19 pandemic, but broke the 41-month continuous downward trend in March of this year (+0.5%).

By industry, price increases in the energy sector were notable, including oil and natural gas mining (+24.5%), oil, coal and other fuel processing (+21.6%), and chemical raw material and chemical product manufacturing (+12.1%).

In addition, prices continued to rise in coal mining, washing and processing industries (+35.3%), non-ferrous metal mining and processing industries (+21.4%), non-ferrous metal smelting and rolling processing industries (+21.4%), electrical machinery and equipment manufacturing industries (+6.2%), and computer communications and other electronic equipment manufacturing industries (+5.8%).

On the other hand, power and thermal energy production and supply, automobile manufacturing, non-metal mineral manufacturing, pharmaceutical manufacturing, and alcohol, beverage, and refined car manufacturing showed a 2.0-5.3% decline in prices compared to the previous year.

The consumer price index (CPI) in September rose 0.9% compared to the same month last year.

September's CPI was higher than last August (+0.8%), but fell below Reuters market expectations (+1.0%).

China's CPI remained negative until the third quarter of last year amid concerns about deflation (falling prices), but turned upward in October of the same year (+0.2%).

Gasoline prices rose 16.6% in September, increasing the rate of increase by 7.3 percentage points compared to August, raising the CPI increase rate by 0.47 percentage points.

In September, prices for industrial consumer goods excluding energy rose 1.6%, and the increase decreased by 0.2 percentage points compared to August.

Prices for storage devices (+46.7%), tablets (+23.6%), computers (+21.8%), and mobile phones (14.9%) also rose at an increasing rate.

Gold jewelry prices rose 22.5%, with the increase rate being 11.1% lower than in August.

In the service sector, prices for travel (+2.1%) and medical care (+4.0%) showed an increase.

The prices of some foodstuffs fell, including pork (-10.0%), fresh vegetables (-8.1%), grains, cooking oil, dairy products, and fresh fruits (-1.5 to -0.6%).

Although the Chinese authorities have introduced economic stimulus measures one after another, household consumption is still believed to have contracted.

Reuters diagnosed that the Chinese economy is continuing an imbalanced recovery, relying more on exports than consumption.