The Factory to the World Has a New Export: Inflation
- Producer prices seen rising 6% by third quarter 2017, CBA says
- Potential drags include policy tightening, excess capacity
Employees make their way to the assembly line area after lining up for roll call at a Pegatron Corp. factory in Shanghai, China, on Friday, April 15, 2016. This is the realm in which the world's most profitable smartphones are made, part of Apple Inc.'s closely guarded supply chain.
Photographer: Qilai Shen/BloombergThe factory to the world has a new export: inflation. And it’s shipping faster than many thought possible just a few months ago.
China’s weakening yuan, stimulus designed to ensure robust growth ahead of a crucial Communist Party Congress next year, and rebounding commodity prices are pushing up factory prices. Having turned positive in September for the first time in more than four years, producer prices rose 1.2 percent in October from a year earlier. That will almost double to 2.3 percent in November, according to analysts surveyed ahead of data due Friday.