China's economy lost steam in November. Consumer prices rose at their weakest pace in more than a year in November and industrial output growth hit its lowest level in more than two years, the National Bureau of Statistics said.
The producer price index, which measures the cost of goods at the farm and factory gate, rose 2.7% year on year in November compared with 5% in October, the data showed.
It was the slowest pace since December 2009 when it rose 1.7%.
Output from China's millions of factories and workshops rose 12.4% year on year in November, compared with 13.2% in the previous month -- the worst performance since August 2009 when it rose 12.3%.
Analysts said the weaker-than-expected data will raise concerns that turmoil in Europe and the United States is hurting China's export-driven economy and likely embolden policymakers to further open credit valves to spur activity.
"Inflation is marching south at an aggressive pace, with the producer price inflation virtually collapsing," said Alistair Thornton, an analyst at IHS Global Insight. "As such, there is likely to be a growing consensus at senior levels regarding the continued lowering of reserve ratio requirements (RRR)."
The country's consumer price index, a key gauge of inflation, rose 4.2% year-on-year in November. The rate was well below the 5.5% recorded in October, but still slightly above the government's annual target of four percent.
It was the slowest pace since September 2010, when inflation stood at 3.6%, and below analyst expectations for 4.4%.
Beijing last week cut the RRR, the amount of money banks must hold in reserve, for the first time in three years to spur lending and counter the turmoil in Europe and the United States that threatens to derail the world's second-largest economy. Analysts said last week's surprise move to cut banks' RRR, which effectively increases the amount of money they can lend, showed Beijing was now more worried about economic growth.
Vice Premier Wang Qishan, China's top finance official, last month issued a dire warning that the global recession was here to stay and would impact the export-driven economy due to weakening external demand.
China's economy is expected to grow 8.9% next year, which would be the slowest pace in more than a decade, a state-run think tank said this week. That compares with an expected growth rate of 9.2% this year and the blistering 10.4% recorded in 2010, Chinese Academy of Social Sciences said.
Copyright Agence France-Presse, 2011