China's producer price index (PPI) in February recorded the steepest increase in nearly eight years while consumer inflation increased moderately, according to the latest data released by the National Bureau of Statistics.  

China's producer price or factory price in the month of February stood at 7.8 percent, narrowly edging out the Reuters economists forecast of 7.7 percent. When calculated on a yearly basis, the producer price shows a steep growth, growing at the fastest pace since September 2008.

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The growth in February's PPI was largely driven by a rise in commodity prices, with raw material prices growing sharply across the board. This was partly due to the boom in construction projects. Globally, the commodity prices have also been on an upswing.   

As for the consumer price index (CPI), it grew at a moderate rate of 0.8 percent in February, instead of 1.7 percent that most analysts had forecasted. Analysts claim that tepid growth in CPI was mostly due to Lunar New Year holidays which helped in driving up the food prices.

The Chinese government has kept CPI target at three percent for 2017, unchanged from the previous year, while the full-year economic growth target or GDP target for 2017 has been kept at modest 6.5 percent. While 2017 GDP target looks very humble, the recent economic indicators appear very promising. The country's all-important manufacturing sector has been on a roll since second half of the last year, with manufacturing activities growing continuously across the country's factories.     

However, most analysts hold a skeptical view about these numbers as they claim that they have been skewed by seasonal factors. 

Tagschina, China CPI, China PPI, Chinese Economy, China Inflation