Chinese inflation hits highest rate since 2012

China’s consumer price index — a key gauge of retail inflation — hit 3.8 percent last month, the National Bureau of Statistics said. (AFP)
Updated 09 November 2019

Chinese inflation hits highest rate since 2012

  • The consumer price index — a key gauge of retail inflation — hit 3.8 percent last month
  • Producer prices, meanwhile, saw their steepest decline in two years

BEIJING: China’s consumer prices grew at their fastest rate in almost eight years in October driven by a spike in meat prices caused by an outbreak of African swine fever, according to official figures released Saturday.
The consumer price index (CPI) — a key gauge of retail inflation — hit 3.8 percent last month, the National Bureau of Statistics (NBS) said, up from 3.0 percent in September and the highest annual rate since January 2012.
Analysts in a Bloomberg News poll had forecast a rate of 3.4 percent.
The spike has led the government to intervene to stabilize prices and guarantee supplies, according to the official Xinhua news agency.
“Chinese leaders are terrified of inflation,” Beijing-based research firm Trivium China said in a note, describing price rises as “one of the big drivers behind the 1989 Tiananmen protests.”
The inflation rate at the time of the student-led uprising stood at 18.25 percent.
Producer prices, meanwhile, saw their steepest decline in two years, sliding for a sixth straight month, hit by the trade war with the United States.
The producer price index (PPI) — an important barometer of the industrial sector that measures the cost of goods at the factory gate — contracted 1.6 percent in October from the previous year, the NBS said.
That came after prices shrank 1.2 percent in December, and represented the sharpest decline since August 2016.
Analysts in a Bloomberg poll had forecast producer prices would shrink 1.5 percent.


Alibaba confirms huge Hong Kong public listing worth at least $13bn

Updated 15 November 2019

Alibaba confirms huge Hong Kong public listing worth at least $13bn

  • Over-allocation options could take the total value to more than $13 billion, making it one of the biggest IPOs in Hong Kong for a decade
  • Alibaba Chief Executive Officer said the group wanted to participate in Hong Kong’s future

HONG KONG: Chinese technology giant Alibaba on Friday confirmed plans to list in Hong Kong in what it called a $13 billion vote of confidence in the turbulent city’s markets and a step forward in its plans to go global.
The enormous IPO, which Hong Kong had lobbied for, will come as a boost for authorities wrestling with pro-democracy protests that have tarnished the financial hub’s image for order and security and hammered its stock market.
Alibaba will offer 500 million shares at a maximum of HK$188 apiece to retail investors, the company said. The number eight is considered auspicious in China.
Over-allocation options could take the total value to more than $13 billion, making it one of the biggest IPOs in Hong Kong for a decade after insurance giant AIA raised $20.5 billion in 2010.
Alibaba had planned to list in the summer but called it off owing to the city’s long-running pro-democracy protests and the China-US trade war. The US and China are now working on sealing a partial trade deal.
Daniel Zhang, Alibaba Chief Executive Officer, said the group wanted to “contribute, in our small way, and participate in the future of Hong Kong.”
“During this time of ongoing change, we continue to believe that the future of Hong Kong remains bright,” he said.
The firm’s shares are already traded in New York. A second listing in Hong Kong is expected to curry favor with Beijing, which has sought to encourage its current and future big tech firms to list nearer to home after the loss of companies such as Baidu to Wall Street.
In the statement, Zhang said that when Alibaba went public in 2014 it “missed out on Hong Kong with regret.”
Mainland authorities have also stepped up moves to attract such listings, including launching a new technology board in Shanghai in July.
The listing comes after the city’s exchange tweaked the rules to allow double listings, while Chief Executive Carrie Lam had also been pushing Alibaba’s billionaire founder Jack Ma to sell shares in the city.
“The listing in Hong Kong will allow more of the company’s users and stakeholders in the Alibaba digital economy across Asia to invest and participate in Alibaba’s growth,” the company said.
It has long been expected to launch a multibillion-dollar stock listing in Hong Kong but appeared to postpone the offering because of political and economic turmoil.
Hong Kong’s key Hang Seng Index rose 0.48 percent in morning trading following the announcement
Chinese shoppers set new records for spending on Monday’s annual 24-hour “Singles’ Day” buying spree, despite an economic slowdown in the country and the worries over the US trade war.
It said consumers spent $38.3 billion on its platforms over that stretch, up 26 percent from the previous all-time high mark set last year.
Alibaba also said it saw record amounts of cross-border sales, underlining its plans to expand globally.
“Globalization is the future of Alibaba Group. We firmly believe the marriage of digital technology and commerce will bring about unprecedented change that will not be limited by borders,” Zhang said.