Key Sentence:
- China’s “factory gate” prices – the measure manufacturers charge wholesalers for products – rose the fastest in the past month.
- The rise in raw material costs comes as Chinese companies face blackouts and rising raw material prices.
China is the world’s largest exporter, so that that price increase could affect other countries. Businesses around the world are struggling with supply issues as economies emerge from the pandemic. China’s severe electricity shortages – caused by surging industrial demand. Official figures show that the producer price index (PPI) rose 10.7% year-on-year in September, the fastest growth rate since records began in 1995.
However, there is currently little evidence that these higher costs are being passed on to Chinese consumers.
China’s consumer price index, also released on Thursday, rose 0.7% from the previous month in September but below most economists’ forecasts. Consumer demand for items such as household goods, clothing, and food may also weaken due to variable costs. The value of goods in China is monitored for signs of rising prices in other parts of the world, leading to higher inflation in countries that import its products.
Countries including the UK and the United States have seen inflation spikes in recent months as their economies reopened after the pandemic.
And lift emergency measures designed to lessen the impasse’s impact. Several countries, including New Zealand, South Korea, and Norway. Have raised interest rates in recent weeks to cool their economies and ease inflationary pressures.
Power outages have crippled many of the country’s industries, especially those that use a lot of energy, including cement production, steel, and aluminum smelting. Prices for coal, used in many of China’s power plants, have hit record highs in recent days. As utility companies struggle to generate enough electricity to meet demand. Beijing has taken steps to ease the energy crisis. Including urging miners to increase production and manage the electricity use of large factories.