Stuttering CPI, PPI no cause for alarm

China's consumer price index (CPI) for March was up 2.4 percent year-on-year and down 0.5 percent month-on-month, according to data released Friday by the National Bureau of Statistics (NBS). Meanwhile, the producer price index (PPI) for the same month contracted by 2.3 percent year-on-year and 0.3 percent month-on-month.

Some analysts believe the monthly CPI and PPI drops are products of weakening demand amid a slowing domestic economy. Yet, it should be pointed out that seasonal factors may have played a big role in these results as well.

It is not uncommon to see consumer prices weaken month-on-month early in the year, as food prices typically decline following the Spring Festival.

Indeed, food prices dropped by 1.6 percent from February to March, with the prices of pork, vegetables, seafood and fruit falling by 7.1 percent, 5.4 percent, 1.9 percent and 1.6 percent respectively, NBS figures reveal.

As for the PPI, this index has already been declining for quite some time, indicating the persistence of deflation in several upstream sectors. This is also a normal phenomenon as structural economic readjustments impact material-producing industries such as steel, glass and cement.