China's consumer price index rose 2.5% YOY in October, the same pace as in September, while the producer price index rose 3.3% to meet market expectations, but lower than the previous reading of 3.6%. A slower rise in producer prices was expected amid a decline in economic momentum and trade dispute with the United States. In the third quarter, China's economy grew at its slowest pace since the first quarter of 2009.
Food prices rose 3.3% YOY, while non-food goods prices rose by 2.4%. On a monthly basis, consumer prices are up 0.2% from a previous 0.7% increase with coming winter. On the other hand, raw material price growth slowed from 7.3% to 6.7%.
The government is targeting inflation at the same rate of 3.0% as last year. The government indicated that consumer prices are expected to be at a reasonable pace of increase, without any surprises. Private and official factory surveys have shown a disturbing drop in months in export orders, suggesting China's intense trade dispute with the United States is pressing companies.
However, government data on exports showed remarkable strength, probably due to the shippers' flight to overcome the high US tariffs on Chinese goods, which will come into effect early next year. China has pledged to cut import tariffs and further expand market access during the week-long China International Import Fair.
