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China’s factory prices rise for first time in 12 months

Reuters Beijing | Updated on February 10, 2021 Published on February 10, 2021

(File Photo): Employees wearing masks work at a factory of the component maker SMC during a government organised tour of its facility following the outbreak of the coronavirus disease in Beijing   -  REUTERS

Covid-19 resurgence in January affected factory output

China’s factory gate prices rose in annual terms in January for the first time in 12 months and at the fastest rate since May 2019, official data showed on Wednesday, suggesting gathering growth momentum for the world’s second-largest economy.

The producer price index (PPI) rose 0.3 per cent from a year earlier, the National Bureau of Statistics said in a statement, but slightly lagged a 0.4 per cent gain tipped by a Reuters poll of analysts. PPI declined 0.4 per cent in December.

The Chinese economy is expected to grow 8.4 per cent this year,following a 2.3 per cent rise in 2020 in the wake of the Covid-19 pandemic that forced the country to shut down for much of the March quarter last year.

But a resurgence of the disease last month, though mostly isolated in Hebei province surrounding Beijing and the north-eastern provinces, raised concerns about temporary disruptions to production.

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Some regional authorities rolled out tough measures including home quarantines and travel curbs to contain what was the country’s worst outbreak since March 2020.

China’s factory activity grew at the slowest pace in five months in January, official data showed, reflecting the outbreak’s impact on production as well as services including logistics and transportation as the country sought to contain Covid-19 ahead of the Lunar New Year holidays.

China does not release several key datasets such as trade,industrial output and retail sales for January and instead reports combined January-February numbers in March, leaving markets with fewer data points to assess the health of the economy.

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The consumer price index (CPI) unexpectedly fell 0.3 per cent in January from a year earlier, the statistics bureau said in a separate statement, compared with no change tipped by the Reuters poll and a 0.2 per cent rise in December.

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Published on February 10, 2021
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