China factory prices surge again as pollution drive curbs output

An employee works at a steel factory in Dalian, Liaoning Province, China, June 27, 2016. — Reuters pic
An employee works at a steel factory in Dalian, Liaoning Province, China, June 27, 2016. — Reuters pic

BEIJING, Nov 9 — China’s factory prices kept surging last month as authorities continued to curb industrial production to combat pollution.

The producer price index rose 6.9 per cent in October from a year earlier, versus a projected 6.6 per cent rise in a Bloomberg survey and matching September’s pace. The consumer price index climbed 1.9 per cent, the statistics bureau said today, compared with a median forecast of 1.8 per cent.

Policy makers signalled a shift away from the growth-at-all-costs model at their twice-a-decade Party Congress last month amid greater focus on curbing pollution and taming financial risk. China has stepped up restrictions on steel mills and aluminium factories before winter, when pollution levels are often at their worst in the northern part of the country.

PPI has stayed at an elevated level because of supply-side reforms, production cuts due to pollution cleanups and the reaction to slower gains a year ago, Shenyin & Wanguo Securities Co. analysts led by Li Huiyong in Shanghai wrote in a note ahead of the release. — Bloomberg

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