China inflation crashes

Tuesday, 10 February 2015

More bad China data with the CPI out at 0.8% year on year for January and the PPI down 4.3% year on year:

The major ingredient in the CPI falls were a tumble in food prices, not least because of a Chinese New Year effect which jacked prices last January setting a high base for this year. Conversely, we’ll see a big rebound in prices next month.

The PPI is of much greater concern. It is an excellent guide to the relative strength of China’s industrial economy and clearly shows the global deflation of commodity prices as well as local shakeouts are hurting.

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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.