China’s Producer Price Index (PPI) witnessed the biggest yearly jump of 9pc in more than a decade on the back of commodity price increase, according to media reports.
The National Bureau of Statistics marked the 9.1pc production price index rise as the fastest production cost increase since 2008.
While the gains surpassed expectations of an 8.5pc increase, the rise comes off a low base. Previously in May 2020, the index dropped to 3.7pc due to the pandemic.
Business sentiment in China remains static in the first quarter. Steel and iron ore companies are not accepting new orders in fear of losing money as their net profit is turning negative. The Chinese government has intervened to help small businesses as raw material prices continue to surge.
The operating profit margins of small and mid-sized companies were 2pc lower than large companies in the first four months of 2021.
On Wednesday, petroleum and natural gas prices shot up by 99.1pc while oil and coal prices increased by 34.3pc
The Consumer Price Index missed the May expectations of a 1.6pc rise and settled for a 1.3pc increase.
The uncertainty over China-Europe deals and the US-China trade war led to a drop in overseas purchases for Chinese manufacturers. While imports from the US declined in May, exports increased substantially from April.