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Rising electricity prices in China have risen to 26 years due to power shortages

Prices for factory gates in China soared in 26 years in October, when inflation and rising commodity reached the second-largest economy in the world.

China’s inflation rate rose 13.5 percent compared to October 2020, according to figures released by the National Bureau of Statistics on Wednesday, the largest jump in the month since 1995.

The gains exceeded the 12.4% predicted by experts surveyed by Reuters, and continue in September. 10.7 percent reading, which was also the highest since 1995.

Factory gate prices refer to the price at which sellers purchase goods from manufacturers, without regard to travel and distribution costs.

Rising prices for manufacturers plus weakening the production process has led to growing fears, which are detrimental to the country’s economic performance because the economic downturn is causing President Xi Jinping to reverse what is happening in China.

Rising prices has further exacerbated the country’s electricity crisis. China is struggling rising coal prices Following the floods in the most difficult mining areas and government targets for clean energy have declined, while the spread of electricity led to a second decline in monthly production in October.

Dong Lijuan, a senior accountant at China’s NBS, said the rise in PPI in October was due to “increased domestic power and production equipment”.

Dong noted the rise in oil prices, which last month was $ 85 barrels in the US, and coal, which reached Rmb2,301 ($ 360) per ton in China, contributed to the increase.

Prices for manufacturing rose 17.9 percent in October compared to the same period last year, Dong added, while prices in the mining and laundry industries rose 103.7%.

But Citi analysts point out that PPI inflation is nearing its peak and will not remain high.

And more recent alternatives to coal mining, including coal miners. promises to reduce prices and a reduction in energy could help reduce inflation, the researchers said.

“Stagflation concerns need to be addressed,” Citi researchers wrote in a letter.

However, some expect that central banks in Beijing may be forced to provide more assistance to address the crisis. reducing economic growth.

“We are waiting [People’s Bank of China] to have more discrimination throughout the year to reduce the recession, “said Jing Liu, a Chinese economist with HSBC.

Consumer prices fell sharply again than economists predicted in October, hitting a 13-month high.

China’s CPI rose 1.5 percent a year, by 0.7 percent compared to September. The price of fresh vegetables rose 16.6 percent, adding to the concern that rising commodity prices would only add to demand.

But Zhaopeng Xing, a Chinese specialist at ANZ, said family incomes were delayed and travel restrictions were set to be curtailed. the spread of Covid-19 can reduce consumer spending.

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