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Chinese consumer price inflation rebounded from 2.0% in February to 2.4% in March. This was in line with expectations. It was largely driven by a seasonal pick-up in food inflation, from 2.7% to 4.1%.
Core consumer price inflation was flat at 1.7% . I really don’t expect any CPI problems for China in the foreseeable future
What concerns me more is the persistent weakness in the PPI, which fell to -2.3% last month a little worse than consensus. The weakness has been ceaseless since the bust in the productive economy of 2011 and the end of the commodity super cycle.
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Given the reform program, which is designed to eliminate oversupply, I see no end it for some time.
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.
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