There were few surprises in China's latest inflation report

Photo by Guang Niu/Getty Images

Chinese consumer price inflation (CPI) remains incredibly subdued.

According to China’s National Bureau of Statistics (NBS), CPI grew by 1.8% in the year to December, up from 1.7% in November but below the 1.9% level expected by economists.

Despite the modest acceleration, it still remains well below the annual rate of around 3% targeted by the People’s Bank of China (PBoC).

Over the year, food prices fell by 0.4%, offset by a 2.4% increase in non-food categories. Food prices fell by 1.1% in the 12 months to November, while non-food inflation grew by 2.5% over the same period.

Over the month, CPI rose by 0.3%, less than the 0.4% level expected.

In a sign that upstream price pressures are starting to moderate after soaring strongly earlier in the year, producer price inflation, or factory gate inflation, slowed to an annual pace of 4.9% in December, well below the 5.8% pace reported one month earlier.

While the weakest annual increase since November 2016, it was still marginally above the 4.8% level forecast by economists.

Mining costs grew by 9.1% from a year earlier, down from 10.8% in November, while price growth for raw materials slowed to 8.1%, down from 9.7% a month earlier.

There has been negligible reaction in financial markets to the data release.

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