China Inflation Rise In November

China's consumer inflation picked up for a third-straight month in November, but remained below the upper limit of a government target range, official data showed on Friday, signs of improving demand in the world’s second-largest economy.

China’s consumer price index (CPI) advanced 2.3% from a year ago, after climbing 2.1% in October, the National Bureau of Statistics said in a report on Friday. A median estimate of economists called for a 2.2% year-over-year gain.

Vegetable prices jumped 5.5 per cent month on month as a cold weather front disrupted supplies, contributing 0.14 percentage points to the CPI growth.

On a year-on-year basis, vegetable prices soared 15.8 per cent, compared with 13 per cent increase in October.

Non-food prices were also higher, rising at a 1.8% pace - a three-year high - versus the 1.7% clip seen in the more before.

Prices of petrol, diesel, gas, coal, water and electricity also increased last month.

However, prices of fruit and pork continued to fall from October, down 2.2 per cent and 1.9 per cent.

In addition, tourism costs including flight prices dipped as the winter is a low season for travel.

However, it was factory gate prices which saw the largest increase, with the rate of prices increases jumping from 1.2% year-on-year in October to 3.3%

The Chinese economy is looking for good news in the wake of Donald Trump’s surprise election victory on November 8. The President-elect is expected to implement protectionist policies by taking aim at existing trade deals he deems to be unfavourable for Washington. Some analysts are concerned about a growing rift between the United States and China at a time when the latter is trying to stem currency instability.

Industrial commodity price inflation was the chief factor behind the rise in producer prices, driven by a surge in the cost of coal, Juian Evans-Pritchard, China economist at Capital Economics explained in a research note sent to clients.

"Stepping back, the big picture is that China’s stimulus driven recovery has stoked domestic price pressure this year, with the most rapid increases concentrated in property prices and industrial commodity prices. The increases in the latter are helping to lift inflation globally," Evans Pritchard explained.