China’s latest inflation data reveals a clear shift beneath the surface, the AI-driven industrial cycle is now feeding into price pressures , even as consumer demand remains subdued. Key Takeaway China's producer prices rose at the fastest pace in nearly four years, driven by stronger demand for AI-related electronics, computing infrastructure and industrial metals. However, soft consumer inflation suggests domestic demand remains weak, highlighting a growing divergence between industrial activity and consumer spending. AI Demand Is Driving Factory Inflation Producer prices (PPI) rose 3.9% YoY Strong demand from: AI infrastructure buildout Electronics and semiconductors Industrial metals like copper and aluminium The global AI spending wave, especially data centre expansion is now directly influencing China’s upstream pricing power. Consumer Demand Still Lagging CPI grew only 1.2% YoY , below expectations Core inflation softened to 1.1% Weak consumption rem...
China exported more than 60,000 electric vehicles (EVs) to the European Union (EU) in September, as Chinese automakers rushed to ship EVs before additional tariffs take effect at the end of the month. Shipments of 60,517 EVs to the 27-nation European trade bloc marked a 61% increase from last year, and was the second-highest monthly export volume on record.
The surge follows the European Commission’s anti-subsidy investigation into Chinese-made EVs, announced in October 2023, which led to a temporary increase in exports. In June, the EU imposed provisional duties requiring guarantees from targeted companies, though officials clarified that tariffs would not be retroactively applied. New tariffs of up to 35% were approved on Oct 4, supported by countries including France, Italy, and Poland.
The spike in shipments reflects Chinese EV manufacturers’ efforts to avoid the impending tariffs, but the measures are unlikely to deter automakers' ambitions in the European market. EVs sold in Europe often fetch higher prices than in China, boosting profit margins for automakers.
Leading Chinese EV companies such as BYD Co, Xpeng Inc, and Zeekr (part of Zhejiang Geely Holding Group Co) are also exploring plans to localize production in Europe, with BYD considering plants in Hungary and Turkey.
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