China’s consumer price index (CPI) rose 3 percent in November from a year earlier, mainly due to higher food costs, official data showed Monday. Food prices climbed 5.9 percent last month from a year ago while non-food prices were up 1.6 percent, the National Bureau of Statistics (NBS) said. In October, overall inflation stood at 3.2 percent.
Meanwhile, the producer price index (PPI), a supply-side inflation gauge, fell 1.4 percent in November from a year earlier, marking the 21st straight month of contraction but improving from a 1.5 percent fall in the previous month.
The fall in PPI, versus positive consumer inflation, shows that many industrial sectors in China are still suffering from an oversupply problem and are not able to pass on higher upstream costs to product buyers, market observers say.
It is very difficult for China to resolve the overcapacity problem in the short term, given the weak external demand, they say. The central government may have to step up efforts to eliminate obsolete industrial capacity, especially in sectors that consume a lot of energy or cause high pollution.
China’s inflation rate is expected to rise to 3.2 percent next year from an estimated 2.8 percent this year as the pork prices may surge amid an undersupply situation, according to some economists.
Due to rising inflationary pressure and overcapacity problem in many sectors, it is unlikely that the People’s Bank of China will loosen its monetary policy over the next six months, they say.
Govt unveils subsidy program for scrapping old ships
China’s Ministry of Transport, along with three other ministries, has rolled out a subsidy program to encourage the replacement of old ships and oil tankers, the China Securities Journal reported Monday. Under the program, authorities will offer a subsidy of 1,500 yuan (US$247) per ton of old vessels scrapped between 2013 and 2015, the report said. The subsidy will be handed out in two equal portions, with one half given upon the retirement of an old vessel and the other upon construction of a new ship, according to the report.
China remote-sensing satellite fails to enter orbit
China’s high-resolution remote-sensing satellite Ziyuan I-03 failed to enter orbit after its launch Monday, Xinhua news agency reported, citing military sources. “The rocket malfunctioned during the flight, and the satellite failed to enter orbit,” a source said, adding that experts are still determining the cause of the failure. The satellite, jointly developed by China and Brazil, was launched at 11:26 a.m. aboard a Long March 4B rocket from the Taiyuan Satellite Launch Center in Shanxi province.
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