For 2018, the Chinese government targets inflation to be around 3 percent.
The politically sensitive food inflation eased to 3.3 percent in October from a seven-month high of 3.6 percent in September, as prices rose at a softer pace for fresh vegetables (10.1 percent vs 14.6 percent) while declines continued to be recorded in cost of edible oil (-0.6 percent, the same as in September) and pork (-1.3 percent vs -2.4 percent). At the same time, cost of fresh fruits increased at a faster 11.5 percent (vs 10.2 percent in September) and prices of eggs went up 8.5 percent (vs 7.1 percent in September).
Meanwhile, non-food inflation picked up to 2.4 percent in October from 2.2 percent in September. Cost went up at a faster rate for: clothing (1.4 percent vs 1.2 percent); transport and communication (3.2 percent vs 2.8 percent); education, culture and recreation (2.5 percent vs 2.2 percent); and other goods and services (1.3 percent vs 0.7 percent). At the same time, inflation slowed for: rent, fuel and utilities (2.5 percent vs 2.6 percent); household goods & services (1.5 percent vs 1.6 percent); and healthcare (2.6 percent vs 2.7 percent).
Annual core inflation, which excludes volatile items such as food and energy, edged up to 1.8 percent in October from 1.7 percent in the previous month.
On a monthly basis, consumer prices went up 0.2 percent in October, easing from a 0.7 percent advance in September and also matching market consensus.
Meantime, the producer price index in China increased by 3.3 percent from a year earlier in October, after a 3.6 percent rise in the previous month and matching market expectations. It was the lowest producer inflation since March, as prices of means of production went up at a softer 4.2 percent (vs 4.6 percent in September), namely raw materials (6.7 percent vs 7.3 percent) and processing (2.5 percent vs 2.9 percent), while there was a pick up in extraction inflation (12.4 percent vs 11.7 percent). In addition, consumer goods inflation edged down to 0.7 percent from 0.8 percent, of which daily use goods (1 percent vs 1.1 percent), food production (0.9 percent, the same as in September) and clothing (1.2 percent vs 1.1 percent). Cost of consumer durable goods declined 0.1 percent (vs 0.2 percent in September). On a monthly basis, producer prices went up 0.4 percent, following a 0.6 percent rise in September.