{"text":[[{"start":14.08,"text":"China has recorded its first year-on-year increase in factory gate prices since 2022 as the impact of the war in Iran ripples across the global supply chain."}],[{"start":26.96,"text":"The producer price index rose 0.5 per cent year on year in March, compared with a decline of 0.9 per cent in February. The last such increase was in September 2022."}],[{"start":40.36,"text":"The world’s second-largest economy has for years grappled with the threat of deflation amid concerns about overcapacity and the fallout from a prolonged property slowdown, now in its fifth year."}],[{"start":54.2,"text":"With the cost of commodities heavily impacting China’s producer price index, the shock from the Iran war has driven it upwards. Domestic demand is still sluggish, however, so the turnaround may not be sustained."}],[{"start":70.24000000000001,"text":"“China’s entrenched industrial deflation ended in March in an unexpected and unconventional way,” analysts at Citi wrote in a note. "}],[{"start":81.24000000000001,"text":"“Higher inflation is better than no inflation,” said Jian Chang, chief China economist at Barclays, adding that China needed a boost from demand to put it on a more “sustainable reflationary path”."}],[{"start":96.73,"text":"So-called involution, a domestic term referring to intense or self-harming competition on price, has swept across China’s industry. That prompted an “anti-involution” drive from authorities last year."}],[{"start":null,"text":"
"}],[{"start":111.31,"text":"Dong Lijuan of the National Bureau of Statistics pointed to the “sharp rise” in international crude oil prices and said prices in the oil and gas extraction industry were up 15.8 per cent month on month."}],[{"start":126.85,"text":"Overall, the PPI rose 1 per cent in March compared with a month earlier."}],[{"start":133.38,"text":"After more than a month of hostilities the US and Iran agreed a two-week ceasefire this week, but the Strait of Hormuz, a critically important route for the global shipping industry, has not yet reopened."}],[{"start":148.87,"text":"Oil prices remain elevated, with prices for North Sea oil this week hitting their highest level on record."}],[{"start":156.5,"text":"Consumer prices in China rose 1 per cent year on year in March, compared with 1.3 per cent in February. Consumer confidence has struggled to gain momentum in recent years given continued declines in new home prices."}],[{"start":173.09,"text":"“Whether this mechanical rebound can seed sustainable reflation remains an open question,” the Citi analysts said. They added that much depended on the Middle East situation, “and the impulse may fade, as was the case during the 2022 Russia-Ukraine shock”. "}],[{"start":193.83,"text":"“Sustainable reflation still depends on supply-side anti-involution efforts, particularly in downstream sectors, alongside a domestic demand recovery.”"}],[{"start":205.32000000000002,"text":"But Lynn Song, chief China economist at ING, said he believed reflation would be more sustainable this time, though economic growth targets could become more challenging to achieve."}],[{"start":218.96000000000004,"text":"“Prior to the Iran war we already saw months of consecutive positive month-on-month PPI and core inflation,” Song said. “Policymakers were quite firm in their communication on ending deflation this year. On top of higher input prices, anti-involution measures should start to rein in price competition.”"}],[{"start":240.54000000000002,"text":"China this year set an official target of 2 per cent for the consumer price index, alongside a growth target of 4.5-5 per cent that is its lowest in decades."}],[{"start":262.11,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1775889927_8089.mp3"}