China consumer prices return to growth in October, producer price slump extends to three years

Deflation pressures successful China alleviated successful October, arsenic user prices returned to maturation aft falling for 2 consecutive months, though shaper prices extended their slump to 3 years arsenic the world's 2nd largest system suffers from anemic home request and a diminution successful exports.

Data from China's National Bureau of Statistics released Sunday showed user terms scale speechmaking for October astatine 0.2%, compared with analysts' expectations of zero, oregon level maturation twelvemonth connected year. Prices had dropped by a much than expected 0.3% successful September.

On a month-on-month ground user prices besides roseate by 0.2%, compared with analysts' expectations of zero growth.

Producer prices successful October fell 2.1%, twelvemonth connected year, compared with Reuters' canvass estimates for a 2.2% decline, completing 3 years successful antagonistic territory. This comes a clip erstwhile the state has been witnessing fierce terms wars, warranting authorities intervention. Industrial overcapacity has further pressured prices. Month-on-month prices roseate by 0.1%.

"In October , policies aimed astatine expanding home request continued to instrumentality effect, coupled with the boost from the National Day and Mid-Autumn Festival holidays," Dong Lijuan, main statistician astatine the municipality part of the National Bureau of Statistics said successful a statement.

While China's steps aimed astatine reining successful terms wars and fueling request look to person started bearing fruit, with the country's concern profits successful September rising much than 21%, experts warn that Chinese section governments' dependence connected taxation gross encourages sustained production, intensifying contention and overcapacity until determination are meaningful taxation changes.

China's manufacturing enactment successful October declined much than expected, contracting to its lowest level successful six months, according to an official survey released Oct. 30. The sub-indexes for production, caller orders, earthy worldly inventory and employment each deepened their contraction, pointing to a crisp manufacturing slowdown and softer demand.

Chinese producers person been successful the throes of request uncertainty owed to commercialized tensions with the U.S. this twelvemonth and anemic user assurance astatine location arsenic Beijing struggles with a prolonged lodging downturn and headwinds to exports.

The country's exports successful October unexpectedly contracted, with shipments to the U.S. clocking double-digit declines for a seventh consecutive month, down 25%, customs information released Thursday showed.

Going forward, export headwinds could weaken arsenic U.S. President Donald Trump and his Chinese counterpart, Xi Jinping, agreed to a commercialized truce during their meeting in South Korea connected Oct. 30, defusing a perchance incendiary concern that had stoked worries of a full-blown commercialized war.

China's enactment past period vowed to boost home consumption arsenic it laid retired the economical roadmap for the adjacent 5 years. China indispensable "vigorously boost consumption," the gathering readout said, according to a CNBC translation.

The leaders elaborated connected the request for lifting depletion with calls to equilibrium it with "effective investment" and "adhere to the strategical constituent of expanding home demand."

—  CNBC's Anniek Bao and Evelyn Cheng contributed to this report.