Chinese producer prices rose in the year through May at their fastest pace since before the 1997 Asian financial crisis, raising prospects of the first interest rate rise in nearly a decade.
Prices of goods at the factory gate were 5.7 percent higher in May than a year earlier as energy and raw material costs climbed, the State Statistical Bureau said on Monday.
That was up from five percent growth in the year through April and marked the biggest annual increase since January 1996, when producer price inflation was 8.4 percent, according to a bureau official.
The figures, which sparked fresh interest rate speculation, come despite signs that China is making progress in slowing its economy.
Officials have said they may raise benchmark lending rates if inflation, as measured by the consumer price index (CPI), exceeded five percent. Consumer prices rose 4.4 percent in the year through May, data last week showed.
"It's consistent with the trend borne out by the latest CPI numbers. This is despite some of the commodity prices starting to peak, or fall," said Qu Hongbin, HSBC economist in Hong Kong.
China also released figures for foreign direct investment (FDI), which analysts said showed foreigners remained bullish towards China in the long term, despite recent worries over the sustainability of economic growth.
May FDI hit $6.29 billion, up 15 percent on a year earlier, according to calculations based on official figures. That was a deceleration from a 17.3 percent jump in the year through April but the trend has been strong.
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