China's inflation is showing signs of easing further, giving Premier Wen Jiabao more room to loosen fiscal and monetary policies as the economy cools and Europe's sovereign-debt crisis threatens exports.
An index of manufacturers' input costs fell the most in 17 months in October, China's logistics federation and the statistics bureau said yesterday. A separate survey by HSBC Holdings Plc and Markit Economics also showed a decline.
China's central bank has paused in raising interest rates and bank reserve requirements as officials assess the risk that Group of 20 leaders meeting in Cannes, France, this week will fail to contain the crisis. Inflation may moderate to below 5 percent in November and December, compared with a three-year high of 6.5 percent in July, said Zhu Jianfang, the most accurate forecaster of the number in Bloomberg News surveys over the past two years.
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