China's Consumer and Industrial Prices Rebound in August

China's key price indicators rebounded in August, with both consumer and producer prices rising month on month after declines in July, data from the National Bureau of Statistics showed on Tuesday.

The turnaround came amid fluctuations in international market prices and domestic industrial transformation and upgrading, while year-on-year growth in both the Consumer Price Index (CPI) and Producer Price Index (PPI) also accelerated.

The national CPI rose by 0.8 percent year-on-year, an expansion of 0.3 percentage points compared to the previous month. The core CPI, which excludes food and energy prices, rebounded to a 1 percent year-on-year increase.

Although food prices fell by 1.4 percent year-on-year, the decline has narrowed; non-food prices rose by 1.2 percent year-on-year. On a month-on-month basis, the CPI turned from a 0.1 percent decrease last month to a 0.4 percent increase.

Dong Lijuan, chief statistician of the Urban Department of the National Bureau of Statistics, pointed out that the month-on-month increase was driven by several factors.

The first is the transmission of international market prices, which led to a 7.2 percent month-on-month increase in domestic gasoline prices and a 7.6 percent increase in gold jewelry prices.

Second, food prices vary seasonally. High temperatures, rainy weather, and fewer pigs ready for slaughter drove up fresh vegetable prices by 5.5 percent and pork prices by 1.3 percent.

Third is technology and travel demand growth. Mobile phones and tablets rose in price due to computing power demand, while summer travel increased the cost of car rentals and flights.

Industrial prices were also rising. The national PPI rose 3.8 percent year-over-year in August, up 0.4 percent from 0.7 percent in July. Industrial producers' purchasing prices rose 5.8 percent annually.

Dong said the upward trend in international crude oil and non-ferrous metal prices directly drove up the prices of related domestic industries such as oil extraction, petroleum refining, and non-ferrous metal smelting.

While domestic industrial transformation and upgrading increased the "smart" content of industries, electronic circuit manufacturing and virtual reality equipment manufacturing prices rose.

August falls in the peak summer period, leading to a seasonal increase in demand for electricity and coal.

Separately, China's exports in August jumped 25 percent and imports rose 28.2 percent in dollar terms, according to official customs data.

The monthly trade surplus was US$119.1 billion. Last month, Chinese exports to the US rose 34 percent and imports nearly 18 percent. Exports to the EU rose 6.6 percent and imports 0.7 percent. Shipments to South Korea rose nearly 50 percent.