China consumer inflation rises, factory price drop continues
China General Chamber of Commerce showed that average order values contracted by the most in nine months, even though total sales expanded as customer traffic grew during the Labor Day holiday. The latest data showed “economic momentum and social demand have continued to recover," said Bruce Pang, chief economist for Greater China at Jones Lang LaSalle Inc.
“However, there are still quite big structural divergences between prices in goods and services, as well as upstream and downstream sectors. Policy support still needs to be stepped up and implemented in an effective way." Some of the rise in consumer prices may be due to administrative decisions rather than any improvement in demand.
Local governments have been increasing utility costs and train fares in recent months, a move that could push the price index higher but leave households with less spending power for other purchases. More than 130 cities and counties have announced hikes in residential natural gas prices, while a few others such as Shanghai and Guangzhou have increased charges for water, according to a report by Tianfeng Securities Co.
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