China factory inflation rises as PBoC boss sees strong H2 growth

AFP, BEIJING: China’s factory price inflation rose again in September, official data showed yesterday, indicating the improving domestic demand while the central bank chief said he expects strong growth in the second half despite fears of slowdown.

The producer price index (PPI), an important barometer of the industrial sector, accelerated to a better-than-expected 6.9 per cent on-year, picking up from 6.3 per cent in August.

The increase comes as the government battles to reduce excess industrial capacity and pollution and will please leaders looking to transform the country’s growth driver from exports and state investment to one based on domestic consumption.

The figures, which followed healthy imports data on Friday, come days before the Communist Party holds its twice-a-decade gathering that will hand Xi Jinping a second term as president.

The data was announced after People’s Bank of China governor Zhou Xiaochuan said the world’s number-two economy could grow seven percent in the second half of the year after expanding 6.9 per cent in the first six months.

“The momentum of economic growth has rebounded this year,” Zhou said at a G30 International Banking Seminar on Sunday, according to remarks published on the bank’s website yesterday.

“The driving force propelling economic growth came mainly from the rapid pickup in household consumption,” he added.

“The development of the service industry has accelerated.”

The over-reliance on investment has saddled the country with a ballooning debt load, prompting warnings from analysts that it could hurt China’s growth and trigger another financial crisis.

“China’s overall leverage ratio is quite high,” Zhou told the audience of policymakers and bankers, blaming the high corporate debt levels in particular.

“We will further deepen reform and promote gradual deleveraging.”

China’s factory gate inflation for September unveiled by the National Bureau of Statistics beat the 6.4 percent forecast by a Bloomberg News survey of economists.

However, the consumer price index (CPI), a main gauge of retail inflation, rose 1.6 per cent year-on-year in September, lower than 1.8 per cent in August, owing to a fall in food prices.

China factory inflation rises as PBoC boss sees strong H2 growth

AFP, BEIJING: Chinas factory price inflation rose again in September, official data showed yesterday, indicating the improving domestic demand while the central bank chief said he expects strong growth in the second half despite fears of slowdown. The producer price index (PPI), an important barometer of the industrial sector, accelerated to a better-than-expected 6.9 per cent on-year, picking up from 6.3 per cent in August. The increase comes as the government battles to reduce excess industrial capacity and pollution and will please leaders looking to transform the countrys growth driver from exports and state investment to one based on domestic consumption. The figures, which followed healthy imports data on Friday, come days before the Communist Party holds its twice-a-decade gathering that will hand Xi Jinping a second term as president. The data was announced after Peoples Bank of China governor Zhou Xiaochuan said the worlds number-two economy could grow seven percent in the second half of the year after expanding 6.9 per cent in the first six months. The momentum of economic growth has rebounded this year, Zhou said at a G30 International Banking Seminar on Sunday, according to remarks published on the banks website yesterday. The driving force propelling economic growth came mainly from the rapid pickup in household consumption, he added. The development of the service industry has accelerated. The over-reliance on investment has saddled the country with a ballooning debt load, prompting warnings from analysts that it could hurt Chinas growth and trigger another financial crisis. Chinas overall leverage ratio is quite high, Zhou told the audience of policymakers and bankers, blaming the high corporate debt levels in particular. We will further deepen reform and promote gradual deleveraging. Chinas factory gate inflation for September unveiled by the National Bureau of Statistics beat the 6.4 percent forecast by a Bloomberg News survey of economists. However, the consumer price index (CPI), a main gauge of retail inflation, rose 1.6 per cent year-on-year in September, lower than 1.8 per cent in August, owing to a fall in food prices.