China’s factory-gate inflation or producer price index (PPI) slowed down to its 14-month low at 6.4% YoY after rising to 8.0% in a month prior, according to the data revealed by the Bureau of Statistics.
The pace in May was in line with the consensus for a 6.4% growth amid weak demand for steel, aluminium and other key industrial commodities due to tight Covid-19 restriction.
Meanwhile, inflation for May came in slightly lower than economist forecast, reporting at 2.1% YoY, compared to 2.2% expected by Reuters Poll.
The country has been battling with surging Covid-19 cases that led to several lockdowns in major cities such as Shanghai and Beijing in April and May before finally reopening in June.
Chinese auto sales showed a 30% growth in May, up month on month with 1.35 million passenger vehicles. However, retail sales of passenger cars were still down 17% year-on-year, according to the Chinese Passenger Car Association.
China has officially reopened Shanghai and Beijing in June, which allows economic activity to return to normal. However, the authorities announced yesterday that Shanghai will conduct a mass Covid-19 testing drive in the south-west area on Saturday, which required a lockdown in the early morning.
The move by Shanghai authorities on upcoming Saturday raises fears among 2.65 million people in the Minhang district that the residence could be locked down for another two weeks if any Covid-19 infections are discovered in the area, following Beijing’s zero-Covid policy.
Shanghai SE Composite dropped as much as 11% during the two-month lockdown period last time.
