China Consumer Inflation Remains at 1.4%

China’s consumer inflation stayed flat at 1.4 percent in March, while producer prices fell slightly less than projected, official data showed on Friday, keeping pressure on profit margins at Chinese companies as Beijing struggles to stimulate growth.  Analysts polled by Reuters had predicted the March consumer price index (CPI) would come in at 1.3 percent, compared with 1.4 percent posted the prior month.

The producer price index (PPI) declined 4.6 percent, the National Bureau of Statistics (NBS) said on Friday, extending a long-running factory deflation cycle that began in March 2012 to three years.  The poll had expected producer prices to fall 4.8 percent from a year earlier, identical to the prior month.

The data follows a surprise recovery in manufacturing activity for March, with the official Purchasing Managers’ Index (PMI), released by the NBS on April 1, edged up to 50.1, in expansionary territory, from February’s 49.9.  Economists and policymakers have been worried that the risk of deflation is rising for the world’s second-largest economy, as the drag from a property market downturn and widespread factory overcapacity is compounded by an uncertain global outlook and soft commodity prices.