Factory gate prices in China were down for the first time in nearly two years last month, official data showed Wednesday, as falling global commodity prices made their mark on an economy ailing under strict Covid controls.

The producer price index (PPI) fell by 1.3 percent on-year in October, according to the National Bureau of Statistics (NBS), pushing it into negative territory for the first time since December 2020.

The figure represented a reduction from September's 0.9 percent rise.

"In October, demand in some industries rose, and the national PPI rose slightly month-on-month," said NBS statistician Dong Lijuan.

"But owing to the high comparison base from the same period last year, the year-on-year figure went from growth into decline."

"Factory-gate inflation is likely to continue falling over the coming quarters due to a further decline in global commodity prices and a higher base for comparison," said Julian Evans-Pritchard, senior China economist at Capital Economics.

"We expect it to stay in negative territory through the final months of the year and much of 2023."

The consumer price index — the main gauge for retail inflation — rose by 2.1 percent on-year in October, the NBS said, moderating slightly from September's two-year high of 2.8 percent.

Consumers in China have been largely spared the impact of a global surge in food and energy costs following Russia's invasion of Ukraine.

"Under the impact of factors including a drop in consumer demand after the (National Day) holiday and last year's high base of comparison, the rise in consumer prices somewhat fell back," Dong said.

– Zero-Covid impact –

China is the last major economy wedded to a zero-Covid strategy, stamping out emerging outbreaks as they occur through snap lockdowns, mass testing and strict quarantines.

Authorities in areas where cases arise frequently invoke the policy to shut down businesses and confine people to their homes at short notice.

Much of the country also remains under a patchwork of travel restrictions, roiling international supply chains and hammering domestic demand.

The Chinese economy beat expectations to grow 3.9 percent in the third quarter, but analysts expect that it will fall well below this year's official growth target of around 5.5 percent.

China's ultra-rich squeezed by slowing economy: Hurun ranking
Beijing (AFP) Nov 9, 2022 –

The wealth of China's billionaires this year dropped by the largest amount in more than two decades, according to an annual ranking, as zero-Covid curbs and a property market crisis stall the world's second-largest economy.

The Hurun China Rich List, released Tuesday, said the total wealth of all individuals with a minimum net worth of 5 billion yuan ($691 million) dropped by 18 percent to $3.5 trillion.

Only 1,305 people made it onto the list — an 11 percent net decrease compared with last year, and the biggest drop in 24 years.

The fortunes of China's ultra-rich have been battered by Beijing's harsh zero-Covid policy, which has heavily disrupted production and supply chains.

They have also taken a hit from stock market routs during a two-year crackdown on the tech industry, and suffered from geopolitical volatility caused by events such as the war in Ukraine.

The property and healthcare sectors were hit especially hard, according to the list.

Property developer Yang Huiyan of Country Garden Holdings lost the most personal wealth at $15.7 billion this year, while Pony Ma, founder of tech and gaming giant Tencent, lost $14.6 billion after a sweeping crackdown on the gaming industry last year.

China's three richest people stayed the same as last year, with Zhong Shanshan, founder of bottled water company Nongfu Spring, increasing his wealth by 17 percent to $65 billion.

Zhang Yiming, the founder of TikTok parent ByteDance, retained second place but saw his wealth drop by 28 percent to $35 billion after the company's valuation dropped.

Alibaba founder Jack Ma fell from fifth to ninth place after losing 29 percent of his wealth to $25.7 billion, while Pony Ma slipped from fourth place to fifth.

Nearly 300 individuals listed last year were absent from this year's list, most from the property industry, which has faced a spiralling debt crisis after the government imposed borrowing curbs in 2020.

The chairman of property giant Evergrande, Xu Jiayin, fell out of the 100 richest to 172nd place as his company sagged under over $300 billion of debt.

The International Monetary Fund has predicted that China's annual GDP growth will only reach 3.2 percent this year.