China’s PPI returned to positive growth in March, but the key issue is whether the rise reflects Middle East supply disruptions or stronger demand from the government’s overcapacity crackdown, says Zhiwei Zhang of Pinpoint Asset Management. He says the split will signal how effective policymakers have been in reducing price competition and supporting demand. CPI data meanwhile showed an unexpected slowdown as food inflation eased after a holiday boost. With uncertainty still high in the Middle E

China’s PPI returned to positive growth in March, but the key issue is whether the rise reflects Middle East supply disruptions or stronger demand from the government’s overcapacity crackdown, says Zhiwei Zhang of Pinpoint Asset Management. He says the split will signal how effective policymakers have been in reducing price competition and supporting demand. CPI data meanwhile showed an unexpected slowdown as food inflation eased after a holiday boost. With uncertainty still high in the Middle East, Zhang expects China’s inflation outlook to remain unclear and Beijing to keep policy unchanged for now.