China PPI Shrinks For 22nd Consecutive Months

China’s producer prices, a measure of the cost of goods as they leave the factory, extended the longest slide since the 1990s in December, adding to evidence that the world’s second-largest economy weakened last month.

The producer-price index fell 1.4 percent from a year before, the 22nd straight drop, and consumer-price gains trailed estimates at 2.5 percent, government reports showed in Beijing. Today’s releases followed declines in gauges of manufacturing and services based on surveys of purchasing managers.

China’s slowdown poses a challenge for President Xi Jinping’s government as policy makers attempt to rein in credit expansion that has sparked concern at a buildup of bad loans. Applying stimulus would escalate the danger of excess leverage, while inaction boosts the odds of gross domestic product growth sinking closer to the official “bottom line” of 7 percent.

Bloomberg

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