October PPI rose 5% in excess of expected inflationary pressure

Every reporter Hu Jian from Beijing in the macro-economic momentum to further consolidate, but also caused the industry to a number of data indicators "too high" concern. To create a 25-month high CPI, behind which there are not to ignore the pushing hands? What will be the impact on the future economic sector? As a follow-up to pull the main force of domestic demand-why consumption in the "Silver Ten" season growth rate decline?　　We try to interpret the October data to provide a certain sense of the "information" reference system for the last two months of this year's macroeconomic judgments. October, the factory price of industrial products (PPI) rose 5% Year-on-year, the increase is 0.7% from September.　　In January-October, PPI rose 5.5% per cent, before the September flat.　　Experts interviewed by the Daily economic news said the upturn in PPI growth would likely boost future CPI trends, although it would take some time for industrial products to be transmitted to consumer goods, but that would add a bit of new concern to the "not-easy" inflationary situation.　　"Import price" rose or the main reason for this May, China's PPI rose to 7.1%, since then began to fall, August and September PPI growth stranded in 4.3%, when market analysis said that the October PPI will begin to uplink, now the data not only rose, but also slightly higher than the market expectations.　　Standard Chartered Bank macroeconomic analyst Li Wei told the Daily Economic news reporter, at the end of August, China's industry began to rebound, processing products have begun to rise, due to the passing of the PPI has a certain lag, so the October PPI rebound in the expected. Gold, oil, agricultural products, non-ferrous metals and other commodity prices have continued to rise since late August, according to the report by the leading economies such as the US and Japan, which are likely to implement further quantitative easing and the depreciation of the dollar.　　The recent impact of imported prices and the rebound in domestic demand have led to a steady pick-up in PPI. The breakdown, the October PPI all types of growth exceeded September: The production cost of goods rose 5.8%, of which the extractive industry rose 11.8%, the raw material industry rose 8.5%, processing industries rose 3.8%; the cost of subsistence factory prices rose 2.6%, of which food rose 5.3%, dress class Rose 1.8%,　　General household category Rose 2.2%.　　In addition, October raw materials, fuel, power purchase prices rose 8.1% Year-on-year, the increase is also 1% than in September. This is highly consistent with the PMI data released on October 1, according to a survey by the China Logistics and Procurement Federation (CFLP), where PMI purchases the price index of more than 70% in 10 industries, and more than 80% in 3 industries, such as chemical fiber manufacturing and rubber plastic products.　　From the product type, raw materials and energy, intermediates, consumer goods and production of manufactured goods enterprises are higher than 60%, of which raw materials and energy and intermediate category enterprises the highest, to more than 70%. The price of agricultural products can not be underestimated. October PMI ProductionThe index rebounded and the purchase price index continued to rise to 54.7% and 69.5%. CFLP's analysis shows that some of the recent crop and agricultural products prices fluctuate greatly.　　Among them, cotton yarn and other raw materials market supply shortage, prices soar, natural rubber and synthetic rubber price increases, including natural rubber price has reached more than 30,000 yuan, climbed to a record high. Guotai Securities analysis reported that the purchase price index higher, it means that the cost of enterprises increased.　　It is possible to further push up the prices of products and social consumer goods. Experts: The next 3 months conduction CPI "in the next 3-6 months, PPI rise is likely to transmit to the CPI."　　"In the October CPI, Non-food categories have begun to grow," says Li. From the historical data, PPI and CPI trend does not exist a clear causal relationship, PPI to the CPI conductive effect is not obvious. In fact, in terms of the composition, most of the PPI basket is the means of production, and more than half of the CPI basket is food and service items.　　Therefore, the PPI trend is mainly determined by the input inflation and the domestic investment cycle, while the CPI trend is mainly in line with the food price fluctuation and the domestic consumption cycle.　　But the second half of the data can be seen, CPI and PPI year-on-year increase in the trend since July, CPI jumped from 2.9% to 4.4%, and PPI fell back to September 4.3%, analysts told reporters, although the two are not the corresponding, but the long period of departure from the economic law.　　Li Wei believes that the PPI can be transmitted to the CPI also depends on the market supply and demand relationship, if the buyer's market, the enterprise needs to digest the cost of their own part of the increase to ensure market share; China now has a good economic fundamentals and strong demand.　　In October PMI, the new manufacturing Order index was 58.2%, up 1.9% per cent, exceeding the month's output index, suggesting that social demand is growing faster than the growth of production, and that companies have conditions to raise consumer prices to pass on cost pressures according to economic rules. On the other hand, Li said that because of China's CPI in the weight of food, so CPI and PPI are also interaction, but the common cause of the impact of their rise is the economic overheating or by the contradiction between the supply and demand of individual products caused by economic disturbances. There is a real situation in China--a one-sided pursuit of high growth, a prolonged period of excess liquidity, fuelled by rising commodity and raw-material prices.