China’s producer prices surge the most since 2008, cutting into business profits

[superadmin]

• China’s producer price index, a measure of production costs, rose 9% in May from a year ago, the fastest since September 2008, data released Wednesday showed.
  
• More pessimistic businesses expect the price increases will last until the end of the year, said Gan Jie, a professor of finance at the Beijing-based Cheung Kong Graduate School of Business.
  
• In the last several weeks, the central Chinese government has announced additional support for small businesses, particularly those affected by rising raw material prices.
  

BEIJING — China’s producer price index rose 9% in May from a year ago as commodity prices surged, the National Bureau of Statistics said Wednesday.


That marked the fastest increase in production costs since September 2008, when the index rose 9.13%, according to Wind Information.

While the gains surpassed expectations of an 8.5% increase, according to a Reuters poll, the rise does come off a low base. The index fell 3.7% in May 2020 during the initial months of the coronavirus pandemic.

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