China’s PPI Weakened Results Worries Investors

China’s producer inflation subdued in August despite weakened domestic demand. It signals a slow steady growth of the country following higher risks to the outlook from the worsened trade dispute with the United States.

Meanwhile, consumer inflation has gained momentum in August although policy maker likes to aim for growth instead of driving prices amid the tendency of the US president to raise their chances in the fight on tariffs trade war.

The PPI, as measure of industrial growth, showed a 4.1 percent increase last month compared to the same period last year than 12 months earlier while in July, the figures exhibited 4.6 percent growth based on the data from the National Statistics Bureau on Monday.

Analysts forecast growth is a continuous growth by 4.0 percent this month as gathered by Reuters and gained about 0.1 percent in July on a monthly basis to 0.4 percent in August.

Raw materials also showed an increase of 7.8 percent in August than last year compared to the 9.0 percent in July.

The third quarter may not have shown good progress but domestic policies may boost infrastructure spending and other related industrial goods in the last quarter, according to Betty Wang, the Hong Kong-based senior China economist at ANZ.

The economy of China also cooled down to 6.7 percent in the second quarter, although, another thing to worry about is the sudden decline which increases just recently despite uncertainty in trade relations with the United States.

Tariffs have been implemented side-by-side on both countries, amounting to $50 billion of each other’s goods while the U.S. president may impose tariffs virtually on Chinese imports into the United States.

Meanwhile, export orders continued its decline in August with domestic and foreign demand slowed down, which becomes cumbersome for many investors on the future outlook of China.