China's Producer Price Index Drops 1.1% in December; Consumer Price Index Falls to 1.2%

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Researched by Industrial Info Resources (Sugar Land, Texas)--In December 2008, China's producer price index (PPI) for manufactured goods dropped 1.1% year over year, which was 3.1 percentage points lower compared with November, the National Bureau of Statistics of China announced on January 22, 2009. The country's PPI has been sharply decreasing for the past four months, hitting a record low since September 2002.

Click on the image at right to see the growth rates of China's producer price index and consumer price index in 2008.

From the full year, the PPI for manufactured goods rose 6.9% compared with 2007, or 3.8 percentage points higher. Prices for raw materials, fuels and power rose 10.5% year over year, or 6.1 percentage points higher year over year.

China's consumer price index (CPI) dropped to 1.2% year over year. From January to December 2008, China's CPI reached 5.9%, which was 1.1 percentage points higher than 2007. The CPI rose 5.6% in cities and 6.5% in rural areas. Prices for food rose 14.3%, contributing 4.65 percentage points to the overall price increase; housing rose 5.5%, contributing 0.82 percentage points; and prices for other categories showed slight rises and drops.

Housing costs in 70 large and midsize cities increased 6.5%, but the growth rate was down 1.1 percentage points over the previous year.

In December, China's industry growth rose 5.7% year over year, which was 0.4 percentage points higher than 5.3% in November 2008. Urban investments in fixed assets was up 21.9%, and the total sales value of social retail sales increased 19% year over year.

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