China's factory-gate prices rose 5.7% in October, the fastest pace in more than four years, while consumer inflation slowed to 0.7%

Prices charged by Chinese factories rose 5.7% in October from a year earlier and 0.7% from September, China's National Bureau of Statistics said on Monday, November 9. That was above the 5.3% economists expected in a Reuters poll and the fastest increase since June 2022, the third straight month of acceleration, CNBC reported.

What is driving factory prices?

Raw goods led the climb. Output prices in mining were up 27.9% from a year earlier and prices for raw materials industries were up 11.6%, the statistics bureau said. Prices that factories pay for their own inputs rose even faster, up 7.9% year on year. Zhang Zhiwei, president and chief economist at Pinpoint Asset Management, told CNBC the jump reflects "very strong external demand."

Why consumer prices slowed

Consumer inflation went the other way. The consumer price index rose 0.7% from a year earlier and was flat from September, the bureau said. That compares with 0.9% in September and a 0.8% forecast in the Reuters poll cited by CNBC, making it the first slowdown after two monthly increases. Food prices fell 1.0% in the month and were 2.9% lower than a year ago, offsetting higher gasoline costs. Core inflation, which leaves out food and energy, eased to 0.8% from 1% in September.

Zhang told CNBC that weak home demand, tied largely to the property market, is a main reason consumer inflation is not picking up, and that he sees no clear sign the housing sector has stabilized. The CSI 300 stock index rose 0.56% after the data was released, CNBC said.

What it means for buyers abroad

Higher factory-gate prices in China can feed into the cost of goods exported to other countries over time, though the size and timing of any pass-through depend on currency moves, tariffs and demand.