Rising food prices push up inflation

China's inflation rebounded slightly in August due to a jump in food prices while industrial production continued to slow, official data released Sunday showed, complicating the government's efforts to stimulate a slowing economy through fresh easing of policies.

The country's consumer price index (CPI), a major gauge of inflation, rose 2.0 percent from a year earlier in August, up from the 30-month low of 1.8 percent rise in July, the National Bureau of Statistics (NBS) said Sunday.

Food prices rose 3.4 percent in August year-on-year, compared with an increase of 2.4 percent in July.

Fresh inflation pressure is expected to rise in the near future due to the continuous rise of international oil prices, a surge of international grain prices and a possible pork price hike from rising demand during the upcoming Mid-Autumn Festival and National Day holidays, Wang Yuwen, a researcher with the Bank of Communications based in Shanghai, said in a research note Sunday.

The producer price index (PPI), which measures the price changes for major commodities by manufacturers at the wholesale level, slipped 3.5 percent in August year-on-year, compared with a 2.9 percent decline in July, the NSB said.

It was the sixth straight month of decline, indicating that weak demand for upstream energy resources and raw materials continued.

Meanwhile, value-added industrial output rose 8.9 percent in August from a year earlier, down from a 9.2 percent rise in July.

"Obviously, the economy is still in a downward trend and will almost touch the bottom," Li Xunlei, chief economist with Haitong Securities, told the Global Times.

"Although inflation may further rise in coming months, it is not an immediate concern compared with the continuous slowdown of the economy. The government will increase policy support to bolster the economy," he said.

The further decline of industrial production growth showed clearly that growth was further weakened and explained why the government introduced a new round of policy easing in the past week, Lu Ting, an economist at Bank of America-Merrill Lynch, said in a report sent to the Global Times Sunday.