China's latest inflation report offered mixed news in September

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Chinese inflationary pressures remain weak, except for the nation’s industrial sector where they continue to run hot.

According to data released by China’s National Bureau of Statistics (NBS), consumer price inflation (CPI) grew by 1.6% in the year to September, decelerating from the 1.8% level reported in August.

The result was in line with market expectations, but still around half the level targeted by central bank, the People’s Bank of China.

By component, the NBS said that non-food CPI rose by 2.4% over the year, up from 2.3% in August. It was the fastest annual increase since April this year.

Offsetting that acceleration, food prices continued to decline, falling 1.4% from one year earlier. That was a steeper decline that the 0.2% contraction in August, driven by a sharp 12.4% drop in pork prices.

However, while CPI moderated, producer price inflation (PPI), or factory gate inflation, accelerated sharply thanks to higher commodity prices.

The NBS said that PPI rose by 6.9% from a year earlier, up from 6.3% in the 12 months to September. That was faster than the 6.3% level expected and the highest level since March this year.

Mining costs grew by 17.2% over the year while those for raw materials grew by a smaller 11.9%.

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