March 28, 2024

Inflation Slows in China on Drop in Pork Prices

HONG KONG — Consumer prices rose less than expected last month in China as the unappetizing and widely televised spectacle of thousands of dead pigs floating upstream of Shanghai helped push pork prices down sharply.

The National Bureau of Statistics announced that consumer prices were 2.1 percent higher in March than a year ago. Prices had been 3.2 percent higher in February.

Pork is a staple of the Chinese diet and its price has long been such a significant component of the country’s consumer price index that it can influence overall inflation. Pork prices tumbled 5.5 percent last month in China from a year earlier, the National Bureau of Statistics said.

Factories and other producers also faced falling prices last month. Producer prices in China were down 1.9 percent in March from a year earlier, compared with a year-on-year decline of 1.6 percent in February.

Chinese policymakers have been struggling with two intertwined problems relating to inflation.

They allowed banks to engage in a massive expansion of lending and off-balance sheet credit last autumn to reverse an economic slowdown. That expansion of credit fanned fears of inflation that has already triggered sharp appreciation in real estate prices in recent months, prompting the government to renew warnings about problems of housing affordability.

But while asset prices may be rising, goods prices have stayed weak as many industries still face overcapacity. Companies have been unable to raise prices, often making it hard for them to make regular payments of interest and principal on their debts.

Manufacturers in China say that while the cost of materials like steel has stabilized or even fallen, wages continue to increase.

“Raw material prices have so far been stable, but we have had to increase worker wages by 20 percent,” said Kevin Mao, the export business manager at the Zhejiang Zhongli Group Company Ltd., a manufacture of bicycle and motorcycle locks in Wenzhou in east-central China. “All the other factories in our area have been doing similar adjustments to their respective worker wages as well.”

Randall Liu, a sales executive at the Xiamen Tawa Enterprise Company Ltd., a maker of wine sacks and sleeping bags in Xiamen in southeastern China, said that weak demand for exports made it hard to raise prices so as to cover wage increases.

“We are only able to transfer a portion of our cost increases to our end customers, so we do take a hit on our margin,” he said.

Usha C.V. Haley, the director of the Robbins Center for Global Business and Strategy at West Virginia University, said in a speech in Hong Kong on Monday that industrial overcapacity was likely to persist in China given numerous corporate subsidies provided by the national and provincial governments. “They do want to maintain social stability and create jobs,” and so are unlikely to reduce subsidies, she said.

Chinese and World Health Organization officials said on Monday that they had not documented any evidence that pigs have been dying from a recent outbreak of H7N9 avian influenza, although an investigation into the deaths continues.

Mysterious hog deaths are not the only reason for the price drop in March. The price of pork tends to follow long cycles in China that lag animal feed prices. When feed prices are high, farmers raise fewer pigs, which tends to push pork prices up and feed prices down. The cycle then reverses itself as farmers rush to raise more hogs before feed prices bounce up again.

Pork prices were little changed in February, sustained by demand during Chinese New Year, but had fallen sharply before then. Many economists had expected pork prices to begin strengthening this spring, however, before the carcasses began showing up near Shanghai.

The drop in pork prices meant that overall consumer prices for all food only rose 2.7 percent in March from a year earlier, the National Bureau of Statistics said. Food prices had been up 6 percent in February.

The National Bureau of Statistics has scheduled for next Monday the release of a long list of other economic statistics, including economic output during the first quarter of this year.

Hilda Wang contributed reporting.

Article source: http://www.nytimes.com/2013/04/10/business/global/inflation-slows-in-china-on-drop-in-pork-prices.html?partner=rss&emc=rss

You’re the Boss Blog: This Week in Small Business: The Clock Is Ticking

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A weekly roundup of small-business developments.

What’s affecting me, my clients and other small-business owners this week.

The Sequestration Budget Cuts: The Clock Is Ticking

The budget talks continue, and here are four graphs that sum up the situation. Kevin Drum says there is no sequestration deal to be made. Matt Miller says the sequestration is overhyped. Alex Seitz-Wald believes you should be afraid. Deborah Solomon says that a new proposal from Alan Simpson and Erskine Bowles “shows how Washington’s affinity for small deals that tackle the deficit incrementally are deepening the nation’s fiscal hole.” Michelle Benjamin says that Congress should employ basic small-business principles to help balance the budget. Officials at the Federal Reserve disagree on how to increase employment.

The Economy: Gas Prices

January’s producer prices remain about the same but industrial production falls. Gas prices are approaching record highs. The Nasdaq starts hits prerecession levels. Housing starts fell in January, and builder confidence went virtually unchanged in February. But the Houston real estate market is in an all-time frenzy, and the Small Business Administration says small businesses in Texas continue to grow. The Architecture Billings Index surges.

Your People: The Oddest Interview Questions

Some workplaces now offer electric car charging for their employees. Karl Stark and Bill Stewart list three reasons to treat employees like family. These are the six happiest and unhappiest industries to work in. Walter Hickey thinks that an increase in the minimum wage could be a huge boon to small businesses. Cindy Krischer Goodman says that remote employees require care to feel like part of the team. Here are the oddest interview questions for 2013. A new application helps employers provide continuing feedback. These guys gave terrible gifts for Valentine’s Day. And this is why hiring “throwaway employees” is bad policy. A Russian reacts to last week’s meteorite.

Management: A Vegan Baker’s Day

A new study finds that internationally focused small- and medium-size enterprises are more likely to prosper in a global economy. Laureen Wishom offers tips on becoming the go-to expert in your niche, including: “Whatever business you are in, the fastest way to build your reputation and increase your visibility is working together with other people.” Did you know that the ultimate co-working space may have been sitting in the middle of your town or city for decades? Mark Zuckerberg buys more Facebook shares and introduces a $33 million science prize with Sergey Brin of Google. A day in the life of a vegan baker is more interesting than you might think. Lisa Braithwaite suggests trying not to be too perfect, and if you’re experiencing a crisis with your product, Marty Brochstein can help. Steve Pavlina reminds us that “if a goal isn’t tough, it’s probably beneath you.”

Finance: Kickstarter

An index reveals deteriorating credit conditions for small businesses as delinquency rises and personal income growth slows. A 3-D pen project on Kickstarter sets a goal of $30,000 and raises more than $1.5 million. But as 3-D printing becomes more accessible, copyright questions arise. An 89-year-old grandmother finances her start-up on Kickstarter, too. Julia Kirby explains how crowdsourcing a “daily twist” paid off for Nabisco. Pinterest is valued at $2.5 billion.

Start-Up: The Valley of Death

Martin Zwilling says there are 10 ways for start-ups to survive the “Valley of Death.” Ninety-four percent of the revenue generated by start-ups in the United States comes from outside Silicon Valley and Silicon Alley. Choire Sicha thinks New York should toss start-ups “a reduced Metrocard once in a while.” This start-up offers locations for cutting-edge board meetings. Stacey Higginbotham says tech start-ups are the luckiest start-ups, and Matthew Lynley shares five rules for building the next big enterprise start-up, including: “Your users are your best salespeople.” A survey shows that starting your own business can lead to a better life. Here’s how some Egyptian entrepreneurs are building start-ups in the midst of a revolution.

Marketing: Tips for Tough Times

Paul Anderson has a few tips for entrepreneurs looking to improve adoption of customer-management software, including: “Before you migrate your old database to the customer-management software, scrub it to remove outdated, wrong, incomplete and duplicate information.” Anna Farmery explains why brands need to be imperfectly perfect. Patrick Coffee believes that the recent Carnival cruise disaster is also a public relations opportunity. This is how to start meaningful word-of-mouth conversations by giving stuff away. Adrienne Erin shares a few little-known ways to cook up great content. Wendy Weiss has five tips for selling in tough times. Pete Leibman explains why looks matter. Walker Smith explains why people buy. Ivanka Trump introduces a new fragrance. A dog changes expressions quickly.

Social Media: Fourth Place

Chris Garrett lists the five essential skills for today’s online marketer. Sujan Patel has five search engine optimization rules to apply now. A new platform enables virtually anyone to build an online business around knowledge, passions, hobbies and work experiences. A popular blogger considers getting rid of comments. A new Pew study reveals which customers are using which social media networks. Here are eight ways to get more leads for your business on LinkedIn. Tumblr becomes the fourth place for brands. Among Inc. 500 companies, blogging and use of LinkedIn is up, while use of Facebook is down. Twitter rolls out a new programming tool for advertisers. Yahoo rolls out a new front page. A guy does a back flip in a Mini.

Around the Country: Ending ‘Showrooming’

Office Depot agrees to buy OfficeMax. FedEx offers a new product to help small businesses streamline shipping, while Square continues its quest for small-business domination with its new Business in a Box. Google may open retail stores. Best Buy tries to end “showrooming.” Starbucks introduces drive-thru video ordering. These are the 21 most on-time airlines. Dan Kois says that reclining in your airline seat is “pure evil.” Drivers on marijuana test their driving skills. These are America’s top 10 cities for small businesses. A Delaware small-business center helps a pub owner expand.

Red Tape: The Postal Service Gets Fashionable

As some businesses criticize the costs of the Affordable Care Act, the federal government announces that it will run 26 health care exchanges. Kent Hoover reports that small businesses will get more (and pay more) for essential health benefits. Projected Medicare spending has fallen by $500 billion. The penny is considered the most wasteful thing the government does, but a digital coin turns four and approaches a $30 value. The cash-short United States Postal Service will introduce a clothing line. Lamar Whitman takes a look at what to expect from the Startup 3.0 bill moving through Congress. This is what you need to know about the Marketplace Fairness Act. State motor vehicle workers in New Jersey call the police on a man who insisted on wearing a pasta strainer on his head during the taking of his driver’s license photo. A federal watchdog office reportedly saves small businesses $2.4 billion in regulatory costs. Chris Peden explains which version of Schedule C to use to file your taxes, and an Internal Revenue Service workshop provides tax-time help for small businesses.

Technology: From Zero to 60 Million

The F.B.I. collaborates with Facebook. Burger King, Jeep and Apple are hacked. MTV and BET pretend they are hacked. Some are pointing the finger at China. Outlook.com replaces Hotmail and goes from zero to 60 million users in six months. Comcast announces a suite of cloud-based business solutions that can be purchased through one integrated Web portal. Google demonstrates how it feels to wear its Glass. Dell’s profit drops 31 percent. Polly S. Traylor wonders if your business should go PC-free. Here are five apps for stellar small-business management and 10 apps you need to dominate your workday.

Tweet of the Week

@JenAbd: The gas price is higher than my GPA.

The Week’s Bests

Mark Suster explains why the “Harlem shake” is the beginning of an important new video trend: “Participation. We are the media. We want to be in it. Create it. Take part in it. Have a say, a vote. Think ‘American Idol’ voting, where the audience gets to feel like they’re participating. And where they’re willing to pay by dialing a paid number to feel like they’re, well, participating.”

Chris Heivly, writing about nondisclosure agreements, explains why he won’t sign your N.D.A.: “I am in the business of backing great teams working on great ideas. Inherent in this new relationship is trust. I am not going to steal your idea. I don’t have time to build a company — I invest in companies. I am not in the business of pitching your idea to others to build. And most important, if I did this just once, I would be labeled, and my deal flow would disappear.”

Christopher Mims explains how robots are eating the last of America’s — and the world’s — traditional manufacturing jobs: “Not everyone is suffering. Skilled workers, for example, are earning more than ever. So are the very rich, those who own the capital that can be put to work in the world’s increasingly person-free farms, mines and factories. But those who used to make middle-class wages are increasingly slipping into lower-paying, service-sector jobs. That’s led to what M.I.T. economist David Autor calls an ‘hourglass economy,’ with more workers at both the top and (mostly) the bottom of the income spectrum.”

This Week’s Question: Do you think it’s evil to recline in an airline seat?

Gene Marks owns the Marks Group, a Bala Cynwyd, Pa., consulting firm that helps clients with customer relationship management. You can follow him on Twitter.

Article source: http://boss.blogs.nytimes.com/2013/02/25/this-week-in-small-business-the-clock-is-ticking-2/?partner=rss&emc=rss

Reports Signal Rising Strength in Consumer Spending

The government said retail sales rose 0.5 percent last month, compared with a 0.4 percent increase, after revisions, in November. Sales in November were previously reported to have gained 0.3 percent.

Economists polled by Reuters had expected sales to rise only 0.2 percent. Sales were up 4.7 percent from December 2011 and up 5.2 percent for the whole of 2012, suggesting momentum in consumer spending as the year ended.

So-called core sales, which excludes automobiles, gasoline and building materials and corresponds most closely with the consumer spending component of gross domestic product, increased 0.6 percent after gaining 0.5 percent in November.

The second consecutive month of gains in core sales suggested that consumer spending picked up in the fourth quarter after rising at an annual pace of 1.6 percent in the July-through-September period.

The government also said on Tuesday that producer prices fell in December for the third consecutive month as food prices declined by the most in a year and a half.

The Labor Department said its seasonally adjusted Producer Price Index slipped 0.2 percent last month. Economists polled by Reuters had expected prices at farms, factories and refineries to drop 0.1 percent.

A 0.9 percent drop in food costs drove most of the December decline. Excluding volatile food and energy costs, wholesale prices rose 0.1 percent, which was in line with analysts’ forecasts.

The core reading suggested that businesses were seeing little growth in price pressures. It could reinforce the outlook that modest inflation would give the Federal Reserve space to continue with easy-money policies aimed at propping up the economy.

The decline in overall prices brought 12-month inflation to 1.3 percent.

The Commerce Department also said business inventories rose modestly in November as sales increased solidly, indicating that a buildup in inventories would not add much to economic growth in the fourth quarter.

Inventories increased 0.3 percent, to a record $1.62 trillion, after rising by the same margin in October.

The gain in November was in line with economists’ expectations. Automobile inventories rose 0.5 percent after increasing 0.8 percent in October.

Article source: http://www.nytimes.com/2013/01/16/business/economy/retail-sales-improve-producer-prices-fall.html?partner=rss&emc=rss

China Inflation Rises Less Than in Previous Month

The government’s Consumer Price Index rose by 6.2 percent over the previous August, according to the National Board of Statistics. That compares with a 6.5 percent rise in July. Producer prices were up 7.3 percent, slightly less than 7.5 percent jump in July.

Analysts cautioned, however, that inflation was likely to remain a long-term problem in a fast-growing economy in which middle-class demand for food and goods was rising and once-cheap manual labor was becoming more expensive.

Taming inflation has been the top economic priority of China’s leaders, who fear that high prices could fuel social unrest. Evidence that price increases are slowing down gives them some leeway to address the impact on of economic problems in the West, which are likely to reduce the exports on which China’s growth depends.

Inflation is “down but not out,” Alistair Thornton, a China analyst at IHS Global Insight, wrote in an early analysis of the state figures. Part of the decrease, he said, came from easing price increases for pork, one of the nation’s staple foods.

Food prices, which account for about a third of the Consumer Price Index, rose by 13.4 percent that month when compared with the previous year. But inflation in goods other than food actually rose last month to 3 percent, a 10-year high , he said.

“A lot of people have made the argument that China’s inflation is not concerning because it’s all food prices, all weather and supply shocks — bad harvests and the like,” Mr. Thornton said. “But the fact that non-food inflation is the highest it’s been in over a decade indicates there is something significant there.”

The government has been aggressively working to tame inflation for much of the year. China’s central bank, the People’s Bank of China, has repeatedly raised interest rates and bank reserve requirements to drain excess money out of the system, and restricted purchases of property to dampen land speculation. the latest figures show that new-home prices dropped or remained steady compared to June in 31 of 70 major cities, and average residential land prices declined nine percent month-on-month.

The government originally pledged to keep the annual inflation rate under four percent in 2011, but Premier Wen Jiabao, the top economic policy maker, more recently said the hope now is to keep it beneath five percent.

Signs of moderating inflation may enable the government to turn its attention to stimulating domestic demand, a move Western economic policymakers have urged China to make for years, J.P. Morgan wrote in a note on the latest figures.

“Support for domestic demand will come from the consumer side through employment growth, rising wages, and a higher individual income tax threshold and from the investment side through social infrastructure projects, such as the affordable housing program, water infrastructure and agricultural investments,” the firm’s China expert, Jing Ulrich, wrote.

A shift to domestic demand would help China’s economy weather any drop in exports related to slowing demand for good in the economically sapped West.

China’s stock markets rose in early trading, apparently in response to the better news on inflation.

Article source: http://www.nytimes.com/2011/09/09/business/global/china-inflation-rises-less-than-expected.html?partner=rss&emc=rss