The inflation collected in China last month, the official figures showed on Sunday, since the Lunar New Year’s holidays increased January spending.
China has struggled to increase consumption and avoid deflation for months as a slow expense, a fall in the property and debt of the local government weighs on growth.
The consumer price index (CPI), a key measure of inflation, increased 0.5 percent last month, compared to an increase of 0.1 percent in November, according to the National Statistics Office.
The reading of January, which coincided with the beginning of the long holidays of the Lunar New Year this year, is the highest since the reading of August 0.6pc.
Last month’s reading exceeded the 0.4pc increase predicted by Bloomberg Analysts
The NBS reported an increase in the prices of the goods associated with the holidays, where millions of people travel to their cities of origin and celebrate with parties and drinks.
Fresh vegetable prices increased by 2.4pc year after year and the price of pork increased by 13.8pc.
The impulse in prices last month is “mainly at the highest food prices and the prices of tourism related to tourism on a lunar lunar vacation prior to the usual,” wrote Goldman Sachs analyst Xinquan Chen , in a note on Sunday.
“But it is likely that the impulse becomes a ballast in February as seasonal demand fades,” Chen said.
China suffered its strongest price drop for 14 years in January 2024, at the end of a four -month deflation period.
Inflation remained below 0.5pc for nine months of 2024.
While deflation suggests that the cost of goods is falling, it raises a threat to the broader economy, since consumers tend to postpone purchases in such conditions, waiting for new reductions.
The lack of demand can force companies to reduce production, freeze hiring or fire workers, while potentially it also has to rule out existing actions, cushioning profitability, even when the costs remain the same.
Beijing announced a series of measures to boost the economy last year, including the reduction of interest rates and the cancellation of residence in housing understanding.
Last month, policy formulators expanded a subsidy scheme for common domestic items, from water purifiers to laptops and electric vehicles.
During the holiday period, sales of appliances and communication equipment in “key monitoring companies” increased more than 10 percent year -on -year, the Chinese Ministry of Commerce said Thursday.
China to further reduce renewable energy subsidies in impulse market reform
China’s main economic planner said Sunday that he would reduce some renewable energy subsidies in the reforms aimed at opening the booming sector to market forces.
China has tried to reduce government support for renewable energy companies in recent years as the sector reaches critical mass.
He installed a record amount of renewable energy last year and has already surpassed a goal to have at least 1,200 gigawats of solar and wind capacity installed by 2030.
The new clean energy projects completed after June 1 must sell electricity to rates determined by the market instead of preferential rates previously used to support China’s energy transition, said the National Development and Reform Commission (NDRC) in a release.
The NDRC urged energy producers to “boost the participation of clean energy in market transactions.”
The commission also said that “it encourages electricity suppliers and electricity buyers to sign several years purchase agreements and prevent market risks.”
Beijing invested more than $ 50 billion in a new solar supply capacity from 2011 to 2022, according to the International Energy Agency.
It has been built almost double wind and solar capacity than any other combined country, according to an investigation published last year.
However, China’s network is struggling to keep up.
The renewable supply is increasingly blocked to prevent the grid from feeling overwhelmed, a process known as reduction.
Beijing has implemented a series of measures during the last decade aimed at wearing renewable energy suppliers of state financial support.
He finished the subsidies for new solar energy stations and wind energy projects on the ground in 2021.
