BEIJING: China said on Saturday (May 10) that consumer prices slumped in April for the third straight month, reflecting persistent challenges as leaders attempt to revive an economy stymied by sluggish spending and a fierce trade war with Washington.
The world’s second-largest economy has grappled with persistent deflationary pressure in recent years, with longstanding woes in the property sector and export headwinds impeding growth.
The latest figures come ahead of Saturday’s start to a meeting of key economic officials from China and the United States in Switzerland, offering a potential offramp for the high-stakes trade war launched by President Donald Trump.
US tariffs on imports from the manufacturing powerhouse now stand at a staggering 145 per cent for many products – and reach as high as 245 per cent cumulatively on others.
Trump suggested on Friday that the tariffs could be cut to 80 per cent, though Beijing has demanded a complete cancellation of the levies that are compounding other challenges facing the Chinese economy.
The consumer price index (CPI) – a key measure of inflation – was down 0.1 per cent last month year-on-year, according to data released on Saturday by the National Bureau of Statistics (NBS), following previous drops in February and March.
The reading was in line with a Bloomberg forecast of a 0.1 per cent year-on-year decline based on a survey of economists, and consistent with the slight drop recorded in March.
NBS statistician Dong Lijuan said in a statement on Saturday about the data that “international imported factors have a certain downward impact on prices in some industries”.
The NBS also announced on Saturday that April’s producer price index (PPI) declined 2.7 per cent year-on-year, accelerating from the 2.5 per cent drop recorded in March.
China’s PPI – another indicator of inflation – has in recent months remained mired in negative territory, and the drop recorded on Saturday was in line with expectations.
“Changes in the international trade environment and a rapid decline in some international bulk commodities have affected the decline in prices in related domestic industries,” Dong said.
China’s exports rose last month despite the trade war, official data showed Friday, an unexpected development attributed by experts to a re-routing of trade to Southeast Asia to mitigate US tariffs.
The trade figures from the Chinese customs bureau showed that while exports to the US dropped sharply in April, those to Thailand, Indonesia and Vietnam surged by double digits.
Chinese policymakers this week eased key monetary policy tools in a bid to ramp up domestic activity.
Those included cuts to a key interest rate and moves to lower the amount banks must hold in reserve in a bid to boost lending – adding to Beijing’s sweeping push to revitalise the economy since September.
Source: CNA
