China’s exports to U.S. fall amid trade war

Container ships are positioned under cranes at the Port of Oakland in Oakland Calif. on Aug. 16 2010

The index came in higher than the median forecast for a 2.7% increase from a Bloomberg News survey of economists.

The consumer price index rose 2.8% in August from a year earlier, matching the level in July, data from the National Bureau of Statistics showed.

Food prices grew 10 percent year on year last month, up from 9.1 percent in July, while non-food prices gained 1.1 percent, 0.2 percentage points lower than that of July.

Consumer prices were also broadly subdued and only supported by a surge of nearly 50 percent in the price of pork caused by African swine fever that has ravaged the country's pig industry.

The central bank on Friday cut banks' reserve requirements for the seventh time since early 2018 to free up more money for lending, and analysts widely expect it to cut some of its key lending rates next week to reduce corporate borrowing costs.

"In our view, China's monetary policy takes into consideration producer prices more than the headline CPI", economists at ANZ Research said in a note.

Tuesday's data also showed China's consumer price index, a main gauge of inflation, rose 2.8 percent year on year in August. A substantial consumer price index increase would indicate that inflation has become a destabilizing factor in the economy, potentially prompting The People's Bank of China to tighten monetary policy and fiscal policy risk.

Among major industries, prices for crude oil and natural gas extraction dropped 9.1 percent year on year, while non-ferrous metals mining and dressing saw producer prices rise 3.7 percent year on year in August.

Overall meat prices, including pork, beef and mutton surged almost 31% in August, compared with July's 18.2% increase, as more consumers shifted to other meat items for protein.

Core consumer inflation, which excludes food and fuel, picked up to 1.5 per cent on-year after a 1.3 per cent gain in the prior month. The oil, coal and other fuel processing industries also saw price deflation worsening to 5.9 per cent in August.

On September 1, the U.S. imposed a 15% levy on more than $125 billion in Chinese imports including smart speakers, Bluetooth headphones, books, diapers and footwear. Economic growth has cooled to near 30-year lows.

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