Investing.com – China’s annual consumer inflation rate (CPI) rose 1.9% in June, in line with expectations, while producer price index (PPI) rose 4.7% in June from a year earlier, beating forecasts of a 4.5% increase, official data showed on Tuesday.
On a month-on-month basis, the PPI rose 0.3% in June, compared with 0.4 percent growth in May, while the CPI fell 0.1% on a month-on-month basis.
China's producer inflation has now picked up for three months in a row after easing in late 2017, although analysts said the rebound in producer prices is unlikely to be sustained amid uncertain global demand and slower domestic credit expansion.
The U.S. tariffs on $34 billion worth of Chinese goods came into effect last Friday, fuelling concerns of a full-blown trade war that would hurt global economy, investment and growth, while also damaging U.S. farm exports and potentially driving up food prices in China.
Trump told reporters that another $16 billion are expected to go into effect in two weeks, and that he is considering to impose additional tariffs on $500 billion in Chinese goods if Beijing retaliate.
In response, China followed up by imposing duties on the same value of U.S. products. China's Ministry of Commerce said it had no choice but to respond to the U.S. after the latter "launched the largest trade war in economic history."
"Prices of major industrial goods edged up and the year-ago basis was low, which boosted a further improvement in producer inflation," Wang Jian, an economist at Shenwan Hongyuan Securities Co Ltd., wrote in a recent note. "But June is probably the peak of the PPI rebound."
China has set its 2018 consumer inflation goal at "around 3%", in line with last year's target.