China factory gate prices slow in January, CPI rises

China's January factory gate prices fell more than economists expected, suggesting that flashes of domestic demand that had stoked consumer prices after the zero-COVID policy ended are not yet strong enough to rekindle upstream sectors.

The producer price index (PPI) was down 0.8% on a year earlier, extending the 0.7% drop the prior month and faster than the 0.5% fall tipped in a Reuters poll.

The consumer price index (CPI) in January was 2.1% higher than a year earlier, up on the 1.8% annual gain seen in December, data from the National Bureau of Statistics (NBS) showed on Friday, but just shy of the 2.2% increase economists had predicted in a Reuters poll.


Economists expect the cost of living in China will pick up over the coming months, with inflation approaching the target of about 3% that the government set last year.