China's annual consumer inflation was recorded at 1.6 percent in October, remaining at a near five-year low according to Reuters.
On a monthly basis, consumer inflation was flat in October as shown in the National Bureau of Statistics's reported figures. The official inflation target set for 2014 is at around 3.5 percent.
In China, according to Trading Economics, the most important components of the consumer price index (CPI) basket are food, which accounts for 31.8 percent of the total weight, and shelter or residence, which accounts for 17.2 percent of the total.
Recreation, education and culture items account for 13.8 percent; transportation and communication for 10 percent, healthcare and personal effects for 9.6 percent; clothing for 8.5 percent; household facilities, articles and services for 5.6 percent; and tobacco, liquor and related products for the remaining 3.5 percent.
Based on National Bureau of Statistics figures, food prices accelerated to 2.5 percent, while non-food cost rose at a slower pace of 1.2 percent.
Among food prices, the highest increases came from egg (+16.4 percent in October from +12.9 percent in September) and fresh fruits (+15.2 percent from +16.7 percent), as gathered by Trading Economics.
Cost of fresh vegetables (-7.2 percent from -9.4 percent) and pork (-3.1 percent from -2.9 percent), on the other hand, dropped even further in October.
For non-food categories, prices were stable for clothing (+2.4 percent) and transportation and communication (-0.3 percent). Higher cost were seen for household equipment and maintenance services (+1.2 percent from +1.1 percent) and health care and personal products (+1.3 percent from +1.2 percent).
Price decreases were reported for entertainment and educational products and services (+1.1 percent from +1.9 percent) and tourism (-2.3 percent in October from + 3.2 percent in September).
The producer price index (PPI) dropped by 2.2 percent in October from a year earlier, according to Reuters. In September, the year-on-year decline was 1.8 percent. Since March 2012, the producer price index has been in the negative.
Li Huiyong, an economist at Shenyin & Wanguo Securities in Shanghai, observed that "the worsening PPI weighed on the manufacturing industry, providing more evidence that China's economic growth will remain under pressure in 2015. Policymakers should take more measures to boost the economy."
Li Gang Liu, chief economist at Greater China, ANZ Hong Kong, added: "As the PPI inflation has remained negative for 32 consecutive months, and the CPI inflation dropped to the lowest level since the global financial crisis, we believe that China has entered into a disinflation process with rising deflation risk. The risk of deflation has also risen as the economy is expected to slow further in the next few quarters."