The Wall Street Journal reports that China’s escalating inflation rates seem to be headed back down as food prices decline:
China’s Customs agency said imports increased 23.1% in August from a year earlier, slowing sharply from the 33.7% growth rate in July as the decline in commodity prices cut the country’s monthly bill for things like crude oil, iron ore and soybeans. Export growth also slowed but by a smaller margin, notching a 21.1% increase. That left a trade surplus, or margin by which exports exceeded imports, of $28.7 billion, 15% more than a year earlier and a record.
At the same time, domestic prices for important food items like pork and cooking oil have stabilized or even fallen in recent weeks. The rapid increase in prices for such goods starting last year was the main cause of China’s inflation rate surging to a 12-year high of 8.7% in February. But last month the consumer-price index was just 4.9% higher than a year earlier, the National Bureau of Statistics said Wednesday, coming in lower than analysts’ expectations and below July’s 6.3%.
