Shanghai faces deflation risks as inflation weakens, trade falls
Print Edition
SHANGHAI’S inflation weakened in January while its trade slumped, indicating the city’s economic slowdown at the start of this year was in line with China’s performance.
The Consumer Price Index, the main gauge of inflation, rose 1.8 percent from a year earlier last month, the Shanghai Statistics Bureau said yesterday.
It slowed from the pace of 2.6 percent in December, and compared with a rise of 0.8 percent nationwide.
The Producer Price Index, the factory-gate measurement of inflation and a harbinger of future consumer prices, dropped 3.3 percent in January, down further from the contraction of 2.3 percent a month earlier.
“Similar to the conditions nationwide, Shanghai is facing increasing deflation risks — a reflection of weak demand,” said Li Maoyu, an analyst at Changjiang Securities Co.
Shanghai’s trade provided further evidence as it tumbled 9.6 percent to US$38.4 billion last month. Exports shed 8.8 percent to US$17.9 billion, and imports fell 10.3 percent to US$20.5 billion.
Shanghai’s gross domestic product grew 7 percent last year, slowing from 7.7 percent in 2013 and lower than the national average.
Economists said January was a traditionally weak season for real activities due to the New Year’s Day holiday and the upcoming Chinese New Year, which falls on Thursday this year.
National economic indicators, including manufacturing and trade data for January, also reflected a continued slowdown around the country.
The official Purchasing Managers’ Index, a comprehensive gauge of operating conditions among manufacturers, fell to a 48-month low of 49.8 last month, suggesting shrinking industrial activities.
China’s trade shed 10.8 percent in January, with both exports and imports falling more than expected. Exports declined 3.2 percent, the first drop in 10 months, while imports tumbled 19.7 percent, the worst since June 2009.
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