中国九月通胀创四年新低

China’s consumer inflation softened in September, to it lowest level in almost 5 years. The figures were even lower than predicted and analysts say that’s now making an even bigger case for monetary-easing. China’s factory gate prices also fell in September for the 31st month, adding to signs that demand in the world’s second largest economy is cooling. Let’s get the details on the data, with our business reporter Michelle Xing.

It’s the lowest CPI since the beginning of 2010. Inflation rose 1.6 percent in September, below the 1.7 percent estimate and well down from the August figure of 2 percent. It’s also well short of the 3 and a half percent annual target set by the government in March and a further indication that China’s economy is cooling down. Now, experts are saying this could increase pressure for monetary stimulus, if needed and that Deflation pressures are growing. It’s widely agreed that moderate inflation can stimulate consumption, as it encourages consumers to buy before prices go up. Deflation on the other hand, encourages shoppers to delay their purchases, and companies to delay investment, negatively impacting the economy.

Now the producer price index or PPI. That’s a measure of the cost of goods coming out the factory gate... and it’s also a leading indicator of CPI trends. In September, we saw China’s PPI falling by 1.8 percent year on year... that’s the 31st consecutive monthly decline. Analysts say that the property slump is dragging down industrial demand even further and overcapacity is still plaguing the economy, both of which lead to sluggish domestic demand. In terms of monetary policy--China’s central bank cut its interest rate for the second time in a month yesterday. That’s a sure sign of monetary easing to reduce borrowing costs. But analysts say that’s simply not enough to turn things around so more extreme measures could be in the pipeline. As for the other key data set to come out this week. We’re awaiting news of foreign direct investment in China in September.. We’ll also be across the three-quarter GDP figures, which should be out next Tuesday. That should give us a much better picture of the overall health of the economy.