China is helping restrain global inflation as firms absorb higher input costs

Author: Eamonn Sheridan | Category: News

A good piece in the Wall Street Journal on many of China's factories taking a hit on the rising price of raw material, not passing along price increases to consumers.

  • While China's producer-price index jumped to a nearly 13-year high in May before edging down slightly in June, it was heavily skewed by higher import prices of oil and other commodities that China has little control over. That has caused little spillover to the country's consumer inflation, which has stayed well below the official target of around 3% for year-end.
  • "China is a price taker this time, and has actually been importing inflation," said Larry Hu, chief China economist at Macquarie Group.
Link to the Journal piece is here (may be gated)  

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