China’s Muted Inflation Leaves Room for Policy Stimulus

Employee work on an assembly line for refurbished computer consoles at the Sketch Global facility in the Lingang Special Area and Comprehensive Zone in Shanghai on Aug. 25. Photo: Bloomberg

(Bloomberg) — China’s factory-gate prices contracted again in November while consumer inflation eased as Covid disruptions suppressed demand, giving the central bank some room to ease policy as the economy tries to recover.

The producer price index fell 1.3% in November from a year earlier after declining by the same magnitude in October, the National Bureau of Statistics said Friday. Economists surveyed by Bloomberg had expected a 1.5% drop in prices.