China producer prices rise for first time in nearly 5 years, CPI picks up

An Ethiopian and Chinese worker inside the Huajian shoe factory on the outskirts of Addis Ababa.
An Ethiopian and Chinese worker inside the Huajian shoe factory on the outskirts of Addis Ababa.PHOTO: AFP

BEIJING (BLOOMBERG, REUTERS) - China's producer prices rose for the first time since 2012, indicating further stabilization in the world's second-largest economy.

Producer prices edged up 0.1 per cent from a year earlier, the National Bureau of Statistics said on Friday (Oct 14), compared with the previous month's fall of 0.8 per cent. It marked the first growth in PPI since January 2012.

Analysts polled by Reuters had predicted producer prices would fall 0.3 per cent on an annual basis.

The consumer price index (CPI) had been expected to rise 1.6 per cent, compared with 1.3 per cent posted the prior month.

Years of deflation for China's factories has abated as global commodity prices recover and domestic demand stabilizes on the back of past stimulus. Still, with external demand tepid, the currency has slipped to a six-year low as growth clouds remain.

"Growth is holding up better in the near term," Morgan Stanley economists Robin Xing and Jenny Zheng wrote in a recent report. "Yet we remain concerned about the deteriorating quality of growth."