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Inflation Subdued to 29-Month Low
China's consumer price index eased to 2.2% in June from a year earlier, marking a 29-month low in tandem with a slowing economy, according to figures from the National Bureau of Statistics. Food prices, which make up one-third of the inflation basket, were up 3.8% compared to the same month a year ago. In 1H 2012 the CPI was up 3.3% from 1H 2011.
PPI Accelerates Falling
China's producer price index, a measure of average changes in prices received by producers for their output, declined 2.1% in June from a year earlier, faster than the 1.4% drop recorded in May, according to figures from the National Bureau of Statistics. The continuous drop gives the government more room to stimulate the nation's slowing economy.
US Manufacturers Move Back Home
American companies including Ford (NYSE: F), machinery maker Caterpillar (NYSE: CAT), earphone maker Sleek Audio and toymaker Wham-O have been shifting production from the Pearl River Delta, a manufacturing powerhouse in southern China, back to the US since March, Yangcheng Evening News reported. The pullback has not occured in a large scale but has been seen elsewhere in the country.
Minimum Wage Hikes Slow in China
Sixteen of mainland China's 31 provincial level administrative regions raised their minimum wages by an average 17% in 1H 2012, the Ministry of Human Resources and Social Security said, adding that the growth rate was well below the 22% recorded in 1H 2011. Economists say thinner industrial margins were to blame and the increase in the minimum wages will likely continue to slow in 2H.
$1 = ¥6.33
@2011 China Economy @ The China Perspective.
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