China's inflation edges up, signaling sustained recovery in domestic demand

China's price levels continued their moderate recovery in August, reflecting sustained improvement in domestic demand under supportive policy measures.

Data released by the National Bureau of Statistics (NBS) on Wednesday showed the consumer price index (CPI) rose 0.4 percent month on month in August, reversing three consecutive months of decline, while the year-on-year gain accelerated from 0.5 percent to 0.8 percent.

NBS statistician Dong Lijuan attributed the uptick to several factors: rising energy prices, seasonal increases in food prices, continued gains in travel services during the summer holiday period, and higher prices for smartphones and computers driven by the surging demand for computing power.

Core CPI, which strips out food and energy prices, edged up to 1 percent year on year from 0.9 percent the previous month.

Factory-gate prices also sent encouraging signals. The producer price index (PPI) rose 0.4 percent month on month in August, swinging from a 0.7 percent decline the previous month, while the year-on-year gain widened to 3.8 percent.

The NBS cited the pass-through effect of rising global commodity prices and stronger demand in some sectors driven by domestic industrial upgrading.