Inflation dips to four-year low in China as economy slows down

 
Chris Papadopoullos
Follow Chris
Domestic demand in China remains weak, hitting both inflation and economic growth
Inflation in China remained low in October, signalling the economy was still cooling.

The consumer price index – the headline inflation figure – was 1.6 per cent higher in October than it was last year, according to figures yesterday released by the National Bureau of Statistics.

Annual CPI is at its lowest since December 2009. “China’s domestic demand growth has progressively lost steam over the course of this year as Beijing refrains from pump-priming the economy,” said economist Diana Choyleva from Lombard Street Research (LSR).

In house estimates from LSR put real GDP growth at an annual rate of 5.1 per cent in the third quarter of the year – below the official estimate of 7.6 per cent and half its figure three years ago.

China has been widely criticised for its lack of reform, especially with regard to its financial sector.

However, next week sees the opening of the Shanghai-Hong Kong Stock Exchange Connect, which will give foreign investors access to Chinese stock markets – previously not possible.

Some economists have pointed to lower commodity prices as reason for China’s low inflation, with other economists arguing subdued demand from China is instead impacting commodity prices.

Related articles