China: PPI jumped at the fastest rate since September 2008

Driven mainly by surging commodity prices, China's producer price index (PPI) increased by 9% y/y in May 2021 from 6.8% y/y in April, the fastest y/y increase in more than 12 years, adding to global inflation worries.

The PPI for producer goods increased by 12% y/y in May while the PPI for consumer goods rose only slightly by 0.5% y/y, showing that it is hard for Chinese producers to pass on rising costs on to consumers. This can be further supported by the widening gap between China’s PPI and CPI growth rate. In May, China’s consumer price index (CPI) increased by 1.3% y/y and core CPI, excluding volatile food and energy prices, rose by 0.9% y/y.

Read more in our monthly publication China Economic Activity Tracker – June 2021

Source: National Bureau of Statistics, CEIC Data