Friday, September 11, 2015
"The change in PPI is very worrying. It could affect corporate profitability, which in turn could affect consumption and the economy," said Li Huiyong, an economist at Shenyin & Wanguo Securities.
"We must step up policy support." The consumer price index rose 2 percent from a year earlier to a one-year high last month, the National Bureau of Statistics said, but the gain was due largely to soaring food prices, not an improvement in economic activity.
Indeed, non-food inflation remained subdued at 1.1 percent, unchanged from July. "The risk for China is still deflation, not inflation. PPI deflation will eventually filter down to affect CPI, and aggregate demand will continue to be weak," said Kevin Lai, chief economist Asia Ex-Japan at Daiwa, adding his firm had just cut its 2016 CPI forecast to -0.5 percent from 0.5 percent.