China’s consumer prices have declined for the first time in 11 years.
The consumer price index (the main gauge of inflation) fell 0.5% in November from a year earlier. This marks the first contraction since October 2009. It was weaker than the median forecast of 0% in a Bloomberg survey of economists. Chinese food prices fell 2% in the year, with pork prices falling by 12.5%.
Analysts note that a slowdown in the Chinese economy could lead to a fall in demand for African resources (data shows bilateral trade dropping sharply since late 2014), changing the dynamics of the Sino-African relationship.
Xing Zhaopeng, a Shanghai-based markets economist, points to ‘higher crude prices and the coming peak season of travel before the New Year’ as reasons for arguing that it is unlikely that consumer deflation will persist.