China inflation: Beijing on ‘alert’ for rising commodity costs despite easing consumer, factory-gate prices

China’s official consumer price index (CPI) rose by 0.9 per cent in January from a year earlier, down from 1.5 per cent in December

China’s producer price index (PPI) rose by 9.1 per cent in January, down from a rise of 10.3 per cent in December, and to the lowest level since July

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China’s official consumer price index (CPI) rose by 0.9 per cent in January from a year earlier, down from 1.5 per cent in December. Photo: EPA-EFE

Published: 8:30pm, 16 Feb 2022Updated: 8:53pm, 16 Feb 2022

China remains on alert to rising commodity prices amid mounting global headwinds despite headline inflation growth softening in January.

Premier Li Keqiang expressed China’s confidence in“tackling inflation” earlier this week before Wednesday’s data confirmed both consumer and factory-gate price growth slowed last month.

Helped by government measures to control raw material costs, China’s official producer price index (PPI), which reflects the prices factories charge wholesalers for products, beat expectations and rose by 9.1 per cent in January from a year earlier. This was down from a rise of 10.3 per cent growth in December, while it was also the slowest growth since July.

The official consumer price index (CPI), meanwhile, also beat expectations and rose by 0.9 per cent in January from a year earlier, down from a rise of 1.5 per cent in December.

We are confident and capable of tackling inflation, but we must stay on alert. Bottlenecks in the services sector could also lead to sectoral inflation

Li Keqiang

“We are confident and capable of tackling inflation, but we must stay on alert. Bottlenecks in the services sector could also lead to sectoral inflation,” Li told a State Council meeting on Monday in official comments released on Tuesday.