In August, China witnessed a modest uptick in its Consumer Price Index (CPI) by 0.6% year-on-year, signaling a slight rise in retail inflation. This increase, though marginal compared to previous months, was largely driven by severe weather events, including deadly floods and intense heat waves, which disrupted farm produce and pushed up food prices.
Conversely, the Producer Price Index (PPI) saw a significant decline of 1.8% compared to the same month last year, deepening from July’s 0.8% drop. On a month-to-month basis, the PPI fell by 0.7% in August, widening from a 0.2% decrease in July. Experts attribute this sharper decline to weakened market demand and falling international commodity prices, which have strained domestic producers.
Dong Lijuan, a statistician at the National Bureau of Statistics (NBS), highlighted that the extreme weather conditions have not only affected consumer prices but also disrupted supply chains, leading to reduced production costs. "The decline in PPI can be largely attributed to insufficient market demand and a downward trend in some international commodity prices," Dong explained.
This economic landscape poses challenges and opportunities for businesses and investors globally. As China navigates these fluctuations, the impact on global markets, especially in sectors like agriculture and manufacturing, could be significant. Sustainable practices and resilient supply chains are becoming increasingly crucial in mitigating the effects of such extreme weather events.
Reference(s):
China's CPI rises amid weather extremes, factory costs decline
cgtn.com
