China's inflation picks up pace in May

Consumer price index (CPI) rose 3.1% in May from a year earlier, while wholesale price index (WPI) rose 7.1%, according to figures from the National Bureau of Statistics. Consumer and producer prices in China accelerated in May with retail inflation outpacing the upper end of the government's target, while bank lending rose faster than expected and retail sales beat estimates. Consumer price index (CPI) rose 3.1% in May from a year earlier, while wholesale price index (WPI) rose 7.1%, according to figures from the National Bureau of Statistics. The results exceeded expectations for a 3% rise in CPI and a 6.9% gain in PPI. The CPI is now exceeding the 3% ceiling of the government's targeted inflation range. However, some analysts expressed doubt the CPI figures would prompt a major tightening response from Beijing.

Other data showed that Chinese banks extended 639.4 billion yuan (US$93.6bn) in new loans for the month, down from the 774 billion yuan extended in April, according to figures published by the People's Bank of China. The lending figure exceeded forecasts for 600 billion yuan in new loans. Separately, money supply as measured by M1 rose 29.9%, easing from April's 31.3%, while the broader M2 metric was up 21%, easing from 21.5% in April, according to data. May industrial-production growth eased to 16.5% from 17.8% in the previous month, missing economists' estimates for 17%. In the year-ago period China's export-oriented economy was just beginning to recover from the collapse in global trade.

Urban fixed-asset investments for the first five months of this year (January-May) eased to 25.9% from 26.1% in the January-April period, though the result was slightly higher than the 25.8% growth anticipated by analysts. But retail sales jumped 18.7% in May, compared with an 18.5% gain in the previous month, today’s data showed.