China factory-gate inflation up for 5th traight month

Beijing: Prices for goods at the factory gate in China expanded for a fifth straight month, the government said Tuesday, in a positive sign of strengthening demand as the world's second-largest economy stabilises.

The producer price index (PPI) rose 6.9 per cent year-on-year in January, according to the National Bureau of Statistics, outstripping an economist estimate of a 6.5 per cent increase in a Bloomberg News survey.

It marked an acceleration from the previous four months and fuelled expectations China could begin exporting inflation into the global economy, despite fears that trade tensions may surge under new US President Donald Trump.

Increase in global crude prices had boosted prices in oil and natural gas exploitation, that contributed to the expansion, NBS analyst Sheng Guoqing said in a statement.

The consumer price index (CPI), a key gauge of retail inflation, rose 2.5 per cent year-on-year in the month, the data showed, also beating a Bloomberg analysis that forecast a 2.4 percent increase.

China is the world's biggest trader in goods, and its performance affects partners from Australia to Zambia, many of which have been mired in tepid inflation for years, which has in turn caused a drag on the global economy.