Chinese Economists Predict Positive Growth of China's PPI in Q4 of 2016
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Chinese economists are saying that the complicated world economic situation and overcapacity have contributed to China's falling producer price index, or PPI.

China's National Bureau of Statistics on Saturday released data showing the PPI dropped 5.2 percent year on year in 2015, marking the 46th straight month of decline.

Research fellow of the Chinese Academy of Social Sciences, Li Xuesong, said the depressed global economy and overcapacity in many Chinese factories resulted in the economic sluggishness.

"From the international point of view, the growing expectation of the increase of U.S. interest rates and the slump in prices for international bulk commodities have an importing impact on us, including the decreasing prices of the raw material products since the second half of 2014. So these factors have further aggregated the producer prices in 2015."

The data came along with the release of the consumer price inflation index, which rose 1.4 percent in the last year, well below government's full-year target of around 3 percent.

Analysts say the rising deflationary pressure caused by sluggish demand will pose a major risk in 2016.

However, economists are optimistic about the situation and believe that the PPI will rebound thanks to the advance of supply-side structural reform.

Cui Kezeng is the chief analyst of Sublime China Information Group Co., Ltd.

"We believe that the prices of bulk commodities were basically running at the bottom, so the decrease in the second half of 2015 was smaller than that in the first half. After some adjustment, the prices will begin to stay stable in the third quarter in this year and turn around in the last quarter, dragging China's PPI to zero to positive growth out of negative growth."

As to the way out, analysts said that efforts to reduce overcapacity and better handle non-performing assets are urgently needed at the moment.

Author： 　　　Source：CRI　　　 Editor：Yang Fan