China's inflation remains stable despite headwinds

China's inflation remained generally stable in March despite sporadic domestic resurgences of COVID-19 and bulk commodity price hikes in the international market, official data showed on Monday.

China's consumer price index (CPI), a main gauge of inflation, rose 1.5 percent year on year in March, the National Bureau of Statistics (NBS) said Monday.

The figure was higher than the 0.9-percent year-on-year growth recorded in February.

A breakdown of the data showed that food prices saw contraction narrow to 1.5 percent year on year, dragging the CPI down by 0.28 percentage points, said senior NBS statistician Dong Lijuan.

Specifically, the price of pork, a staple meat in China, slumped 41.4 percent year on year, compared with a 42.5-percent decrease a month ago. However, the price of fresh vegetables, which skid 0.1 percent February, saw a 17.2-percent increase last month, the data showed.

Non-food prices rose 2.2 percent from a year earlier, contributing about 1.77 percentage points to the CPI growth, said Dong.

The core CPI, which excludes food and energy prices, gained 1.1 percent year on year, flat with a month ago.

On a monthly basis, the CPI remained flat. Food prices dipped 1.2 percent and non-food prices rose 0.3 percent.

"Since the first quarter, Chinese authorities have made continued efforts to ensure the supply of people's daily necessities and stabilize the prices of these necessities," said Wang Likun, a researcher with the Development Research Center of the State Council, noting that supply and demand remained generally stable.

In contrast to price hikes seen in other economies, China saw its inflation remain within a reasonable range, said Guo Liyan, a researcher with the Chinese Academy of Macroeconomic Research.

"It demonstrates the strong resilience of the Chinese economy, with its large market scale and the country's effective measures to ensure abundant supplies and stable prices," Guo said.

Monday's data also showed the country's producer price index (PPI), which measures costs for goods at the factory gate, went up 8.3 percent year on year in March.

Prices continued to rise in the oil and nonferrous metal industries as geopolitical and other factors pushed up the costs of international bulk commodities, Dong said. This partly led to China's monthly PPI increase.

Last week, a State Council executive meeting noted that domestic and external environments are faced with growing complexities and uncertainties, some of which are beyond expectations.

The meeting called for the use of monetary policy tools as appropriate to more effectively support growth of the real economy.

Wen Bin, chief analyst at China Minsheng Bank, believes the inflation figure will put limited pressure on the country's monetary policy.

Analysts believe that with adequate monetary policies to shore up economic growth and boost market confidence, China is capable of warding off potential risks amid a changing economic landscape.