Chinese inflation shows lingering weakness

Friday, 8 February 2013

China’s January inflation figures are out and some will take reassurance from the on consensus 2% figure.

But it’s the producer prices that are of interest, which have fallen away again down -2.2% versus -1.6 expected.

At this point those looking for an accelerating Chinese recovery in industry might want to see some pricing power returning. This looks to me like a grind back to growth, not a resurgence.

Then again, there are no doubt Chinese New Year distortions here as well.

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.