Chinese producer prices up 5.5 % y-o-y in December

The recovery in producer prices in China reflects higher commodity prices, the yuan's weakening against the dollar and higher capacity utilisation. In contrast, the rise in consumer prices slowed to 2.1 % y-oy in December. Core inflation, which excludes food and energy prices, remained unchanged from the November 1.9 % figure.

Higher producer prices have reduced worries about deflation and the need for additional stimulus.