Producer-price inflation accelerates to 8.2% in May

By Lydia Chen  |   2008-6-11  |     ONLINE EDITION

CHINA'S producer-price inflation rose at the fastest pace in more than three years last month.

The Producer Price Index, the main gauge of factory-gate inflation, rose 8.2 percent in May from a year earlier after gaining 8.1 percent in April and 8 percent in March, the National Bureau of Statistics said this morning.

Crude oil factory-gate prices were the fastest growing sector at a year-on-year pace of 30.9 percent last month, slower than April's 37.9 percent, followed by steel prices at 26.7 percent and coal prices at 24.1 percent.

Reconstruction work after the May 12 earthquake in Sichuan may stoke price rises for raw materials, adding to increased oil and wage costs.

The higher PPI may also drive up May's consumer price index, which will be released tomorrow morning.

For the first five months, producer prices climbed 7.4 percent from a year earlier, bureau said.

China is trying to cool inflation while avoiding a slump in the world's fastest-growing major economy as global demand for its products fade. Surging raw material prices and a new labor law have added to company costs that may be passed on to consumers.