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Impact of Price Changes in Key Chinese Sectors (March)
Percentage increase in producer prices across specific energy-intensive sectors in China.
Primary Sources
China's factories jolt back to inflation on Iran war price
Follow our live coverage here.BEIJING – China’s factory-gate prices rose for the first time in more than three years in March, in an early sign that the war in Iran is feeding cost pressures into the world’s second-largest economy.China had been trapped in a deflationary spiral since late 2022 as sluggish domestic demand and a manufacturing glut led to intense price wars that eroded company profits and slowed wage growth. But economists warn that a shift to inflation driven by higher costs rather than stronger demand could leave Beijing boxed in, squeezing corporate margins, crimping growth and narrowing room for stimulus.The producer price index increased 0.5 per cent from a year earlier, data from the National Bureau of Statistics (NBS) showed on April 10, ending a 41-month streak of declines driven partly by intense price-cutting by businesses in a phenomenon widely dubbed as “involution”. The increase in producer prices is a result of “factors including a rapid surge in global commodity prices as well as an improved supply-demand relationship in certain domestic industries”, NBS analyst Dong Lijuan said in a statement accompanying the data release.Producer prices surged in energy-intensive industries, with the non-ferrous metal mining sector recording a 36.4 per cent jump in March and non-ferrous metal smelting and processing posting a 22.4 per cent rise.Although China is more immune to oil shocks after years of investment in renewables and efforts to secure stable supplies, the disruption of global energy flows by the conflict in the Middle East is still driving up costs for producers. China has already raised petrol prices three times by roughly a quarter since the war started.Manufacturers are already finding it difficult to pass on the higher costs to buyers and could end up with even thinner profits. In a sign of pressure on their profits, purchase prices of raw materials rose 0.8 per cent from a year ago – faster than the 0.5 per cent gain in their selling prices. While the petroleum and natural gas extraction sector saw prices rise 5.2 per cent, they declined 4.5 per cent in the refining industry, reflecting a slower transmission of cost increases to downstream sectors.Consumer prices rose at a slightly slower pace in March. The consumer price index (CPI) ticked up 1 per cent year on year, compared with a 1.3 per cent rise in February. On a monthly basis, CPI fell 0.7 per cent, compared with forecasts for a 0.2 per cent decline and following a 1...
Behind China's 'active efforts' for an Iran ceasefire: Business trumps ...
BEIJING — China's ties with countries such as Iran and Russia have raised expectations of a bigger diplomatic role, but Beijing remains focused on protecting its own domestic interests, including global exports.That stance underpins Beijing's circumspect acknowledgment of reports that it pushed Iran toward this week's temporary ceasefire. A New York Times report cited three Iranian officials as saying China played a role, while AFP cited U.S. President Donald Trump.China has made "active efforts" to end the conflict, Foreign Ministry Spokesperson Mao Ning said Wednesday, when asked by the press about the reports. She emphasized that Foreign Minister Wang Yi had made 26 phone calls to representatives of countries including Russia, Saudi Arabia, Germany and Iran since the U.S.-Israel strikes on Iran began on Feb. 28.But Beijing stopped short of confirming direct mediation.China called for an "immediate stop" to military operations after U.S.-Israel strikes against Iran in late February. When asked on March 3 about Iran's counterattacks, China's Foreign Ministry did not mention Tehran specifically, urging instead for "all parties" to prevent the conflict from spreading."What Beijing did is not really about direct intermediation," said Zongyuan Zoe Liu, a senior fellow for China studies at the Council on Foreign Relations."What Beijing did is, more precisely, broker[ed], facilitated the ceasefire," she said Friday on CNBC's "The China Connection. "From that perspective there's nothing [that has] changed with regards to Beijing's foreign policy. It does not mean Beijing is becoming more active." Instead, she noted Beijing is concerned about the risk of a global downturn from the war that would hurt its export-oriented economy.Net exports contributed to about one-third of China's GDP last year, despite heightened U.S. tariffs, leaving its economy exposed to disruptions in global trade.IMF Managing Director Kristalina Georgieva warned Thursday that global growth would slow even if the ceasefire holds, citing lingering uncertainty around the Strait of Hormuz.watch nowThe strait handles about one-fifth of global oil supply, connecting the Persian Gulf on the coast of Saudi Arabia with the rest of the world. While China is the primary buyer of Iranian oil and relies on the waterway for just under half of its seaborne oil imports, that represents just 6.6% of China's total energy consumption.Still, China faces "immense pressure due to rapidly rising energy costs, and...
China's factories slip back into inflation on Iran war price shock
China's factory-gate prices rose for the first time in more than three years in March, signalling that the war in Iran is feeding cost pressures into the world's second-largest economy. Economists warned that a shift to cost-driven inflation, rather than demand-led growth, could squeeze ...
China's factories snap years-long deflation spell on Iran war price ...
BEIJING: China's factory-gate prices rose for the first time in more than three years in March, in an early sign that the war in Iran is feeding cost pressures into the world's second-largest ...
