The Hang Seng Index fell 0.6 per cent to 19,753.26 at the noon break. The Hang Seng Tech Index also slipped 0.6 per cent. China’s CSI 300 Index shed 0.5 per cent and the Shanghai Composite Index eased 0.4 per cent.
China’s producer prices, a measure of factory-gate costs, dropped by 2.5 per cent from a year earlier in November, marking the 26th consecutive month of declines, the National Bureau of Statistics said on Monday. Consumer prices rose by 0.2 per cent from a year earlier, decelerating from a 0.3 per cent increase for the previous month, it said. The reading was lower than the 0.4 per cent growth forecast from a Bloomberg survey of economists.
“The deflationary pressure in the economy is persistent,” said Zhang Zhiwei, an economist at Pinpoint Asset Management. “Economic activities stabilised recently but the recovery is not strong enough to boost inflation yet. It requires a much stronger fiscal push to get China out of the deflationary environment.”
China has plenty of room to boost its fiscal deficit ratio next year, the official Xinhua News Agency said in a commentary on Friday, ahead of an annual economic work conference later this week. China is “relatively cautious” about setting its fiscal leverage level, which has been kept under 3 per cent in most years and is significantly below other major economies, it said.
