Chinese inflation slows sharply

Thursday, 11 September 2014

China has released August inflation data with the CPi in at 2% an PPI at -1.2%:

Both prints are weak but the PPI is more important to Australia. Weakness in industrial prices suggest weakness in the sectors that import bulk commodities. Given the degree of price falls we’re seeing in the steel sector this is perhaps no surprise but it does reinforce the notion that all is not well.

Having said that, the combined weak prints are certain to fire up Western analyst calls for more stimulus.

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.