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China inflation jumps to 2.4% year-on-year in March
by Staff Writers
Beijing (AFP) April 11, 2014

China auto sales growth slows in March: industry group
Shanghai (AFP) April 11, 2014 - Growth in auto sales in China -- the world's biggest car market -- slowed sharply in March, an industry group said Friday as the economy weakens.

Sales of all types of vehicles rose 6.6 percent year-on-year to 2.17 million units in the month, the China Association of Automobile Manufacturers (CAAM) said in a statement. Growth decelerated from a 17.8 percent surge in February.

Sales of passenger vehicles alone expanded 7.9 percent on-year to 1.71 million units in March, the association said, citing strong demand for sport utility vehicles and multi-purpose vehicles.

But Chinese brands recorded only a 39.3 percent market share for March in the passenger car segment, it said.

Foreign carmakers have traditionally fared better in China due to their brand recognition and perceptions of higher quality.

US auto giant Ford said Tuesday its China sales jumped 28 percent on-year to 103,815 vehicles in March, while competitor General Motors announced last week that its sales in China rose 7.8 percent to 313,283 units for the same month.

China's auto sales surged 13.9 percent to 21.98 million vehicles last year, but analysts say restrictions on car numbers by some cities could cut into purchases.

The eastern city of Hangzhou announced last month it will limit the number of car plates granted each year to ease traffic congestion and control pollution.

Chinese inflation accelerated to 2.4 percent year-on-year in March driven by higher food prices, official data showed Friday, though economists warned there was still a risk of deflation.

The rise in the consumer price index (CPI) was up from the 2.0 percent seen in February but well below the 3.5 percent annual target set by Beijing and adds to unease about the economy after Thursday's disappointing trade data.

It was also marginally below the median forecast of 2.5 percent in a survey of 16 economists by Dow Jones Newswires.

The increase was chiefly driven by a 4.1 percent year on year increase in food prices, the National Bureau of Statistics (NBS) said in reporting the figures.

February's weak result had prompted economists had warn that there was a growing risk of deflation in the world's second-largest economy. And after the latest data, they said that threat remained.

The NBS said the producer price index (PPI) fell 2.3 percent in March, accelerating from February's 2.0 percent slip.

The PPI result indicates "weak demand for manufacturing goods", ANZ Bank economists Liu Li-Gang and Zhou Hao said in a research note.

"As the PPI inflation remained negative for more than two years and PPI is an important leading indicator for CPI, the deflation risk is looming over the horizon," they said.

Moderate inflation can be a boon to consumption as it encourages consumers to buy before prices go up but economists say falling prices encourage consumers to put off spending and companies to delay investment, both of which act as brakes on growth.

"A seasonal pick-up in food inflation in March does little to change China's broader inflation outlook," Julian Evans-Pritchard, China economist at Capital Economics wrote in a reaction to the data.

China's CPI, a main gauge of inflation, rose 2.6 percent in 2013, unchanged from 2012.

Leaders in Beijing say they want to wean the economy off investment as the key growth driver and shift the focus to consumer spending.

The country's gross domestic product grew 7.7 percent last year, the same as in 2012 -- the slowest rate of growth since 1999's 7.6 percent.

The last time GDP was any lower was in 1990, when it was measured at 3.8 percent.

Chinese Premier Li Keqiang last month announced a growth target of "around 7.5 percent" for 2014.

Official data on Thursday showed Chinese exports and imports both fell sharply in March, potentially another worry following a string of downbeat indicators indicating a slowdown in the Asian economic giant and key driver of global growth.

Imports slumped 11.3 percent year-on-year to $162.4 billion while exports fell 6.6 percent to $170.1 billion, the General Administration of Customs announced, resulting in a surplus of $7.7 billion. Economists had expected both to grow.

Li, speaking Thursday at a political and economic forum that China hosts annually, appeared to shrug off concerns.

"The Chinese economy is off to a stable and good start," he said, according to the Xinhua news agency.


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China's GDP growth to slow to 7.5% this year, 7.3% next: IMF
Beijing (AFP) April 08, 2014
The International Monetary Fund said Tuesday China's economic growth would slow to 7.5 percent this year and 7.3 percent in 2015, avoiding a "hard landing" if the government addresses risks and undertakes reforms. Releasing its latest World Economic Outlook report, the IMF also said India, South Korea and Indonesia among broader Asian economies should benefit from an improving export environ ... read more

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