China producer price index falls for first time in nearly two years

FACTORY gate prices in China fell for the first time in nearly two years, official data showed Wednesday, as the world's second-largest economy languishes under Beijing's strict Covid controls.

The producer price index fell by 1.3 per cent on-year in October, according to the National Bureau of Statistics (NBS), pushing it into negative territory for the first time since December 2020.

The figure represented a reduction from September's 0.9 per cent rise.

Consumer prices rose by 2.1 per cent on-year in October, the NBS said, moderating slightly from September's 2.8 per cent.

China is the last major economy wedded to a zero-Covid strategy, stamping out emerging outbreaks as they occur through snap lockdowns, mass testing and strict quarantines.

Authorities in areas where cases arise frequently invoke the policy to shut down businesses and confine people to their homes at short notice.

Much of the country also remains under a patchwork of travel restrictions, roiling international supply chains and hammering domestic demand.

The country's economy beat expectations to grow 3.9 per cent in the third quarter, but analysts expect that it will fall well below this year's official growth target of around 5.5 per cent. AFP

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