China’s producer price index fell more than expectations in October to reach the lowest level in three years due to weak manufacturing sector, but the consumer prices continued their climb.
Data from the National Bureau of Statistics (NBS) showed on Saturday that the Producer Price Index (PPI), a key indicator of profitability of corporates, dropped 1.6 percent in the year ended October. Analysts were in favor of a 1.5 percent fall.
On the contrary, the consumer price index (CPI) recorded an annualized 3.8 percent soar, the fastest pace in nearly eight years, surpassing projections of 3.3 increase.
Some analysts have attributed the rise to concerns regarding the country’s policymakers looking to implement measures to support demand.
The factory's contraction was punctuated by lower prices of raw materials, including in oil and gas extraction and ferrous metal industries, where the manufacturing PMI indicated a contraction for a sixth consecutive month.
As for the trade war, officials from both China and the United States said this week that they had agreed to eliminate tariffs on each other's goods, but U.S. President Donald Trump said on Friday he did not agree with China's tariff rollback.
Meanwhile, representatives of China and the United States are negotiating the completion of the first part of the trade agreement in stages, as investors fear the collapse of trade talks.
people's bank of China (BOE) on Monday set the yuan exchange rate at 6.9933,
compared with 6.9945 on Friday.